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Firm ups IC forecast for '05 but drops '06 projection

Posted: 25 May 2005 ?? ?Print Version ?Bookmark and Share


A surge in average selling prices (ASPs) for ICs has prompted an investment banking firm to raise its overall semiconductor growth forecast from minus 0.5 percent to positive 7.1 percent in 2005.

Paul Leming, an analyst with Princeton Tech Research, in a report also lowered his IC forecast for 2006, from positive 9.8 percent growth to plus 6 percent. In 2007, the total IC market is expected to grow 9.3 percent, Leming said. The figures include ICs, memories, discretes, optoelectronics and sensors.

The forecast differs with some researchers, especially Gartner Inc., which predicts that growth in the semiconductor market will slow down to 2.1 percent in 2006 from a projected 3.6 percent this year. According to Gartner, the industry's Achilles heel will be a drastic decrease in the growth of memory, which is expected to fall 13.8 percent in 2006 compared to 2.9 percent in 2005.

Leming, on the other hand, sees 5.9 percent growth in the memory market in 2005 over 2004. In the overall IC market for 2005, "ASPs and revenues have been stronger than expected," he said. "This upward move in ASPs has been more the result of a shift in the industry product mix towards higher ASP products."

However, ASPs are expected to "trend down" in 2005 despite higher-than-expected sales for digital signal processors, microcontrollers, and microprocessors, he said.

Originally, Princeton Tech Research projected that the overall IC market would fall by 0.5 percent this year, from $206.2 billion in 2004 to $205.2 billion in 2005.

Now, it projects the overall IC market will grow 7.1 percent in 2005, from $212.9 billion last year to $228.1 billion this year. The 2004 number is based on an updated figure for that year.

The overall IC market is projected to grow to $241.7 billion in 2006, up 6 percent over 2005, according to the analyst. Originally, he projected growth of 9.8 percent in 2007. In 2007, the market is expected to hit $264.1 billion, up 9.3 percent over 2006, he said.

- Mark LaPedus

EE Times

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