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2008 may bring 20% IC growth, says analyst

Posted: 22 Sep 2006 ?? ?Print Version ?Bookmark and Share

Keywords:IC Insights? semicon? semiconductor? chip market? IC market?

The next two years should be good ones for chipmakers and their suppliers in the equipment industry, with 2008 particularly strong, according to Bill McClean, president of IC Insights Inc.

Speaking at a lunch organized by the Semiconductor Equipment and Materials International association early this week, McClean said IC revenues growth this year will match the 8 percent growth seen in 2005. Chipmakers will see 9 percent growth in 2007, and then the cycle will peak with a 20 percent revenue increase in 2008.

According to McClean, four factors will combine to make 2008 a good year: U.S. presidential elections, the summer Olympics in China, adoption of Microsoft's Vista operating system, and a ramp up of digital television production preceding the mandatory adoption of digital TVs in 2009 by the Federal Communications Commission.

"Among the various research firms, our forecast for 2008 is the highest out there right now. We see 2008 being the peak, followed by a slower 2009," he said. His forecast is holding steady, despite near-term worries about relatively high inventory levels. Intel, in particular, has a backlog parts.

Ed White, a managing director at Lehman Brothers Inc. who tracks the semiconductor equipment industry, said wireless and mobile systems are driving growth for the next few years, much as the networking of personal computers drove growth in the 1990s.

"We see an extended growth cycle through 2008," White said. "More people are buying mobile and wireless systems for communications and entertainment purposes. The semiconductor content in these handhelds is growing, which is fueling relatively high investments in leading-edge fab capacity. This year, semiconductor capital equipment revenues will increase 23 percent, with 10 percent growth predicted for next year and further potential growth in 2008."

Memory manufacturers also will benefit from the "steady growth" in mobile systems, with both DRAM and NAND flash manufacturers benefiting, the Lehman Bros. analyst said.

- David Lammers
EE Times

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