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Gartner trims chip market forecast after weak Q1 foundry sales

Posted: 30 May 2007 ?? ?Print Version ?Bookmark and Share

Keywords:chip market growth? Gartner forecast? Q1 foundry sales?

The market for devices from foundry suppliers is going to grow by 5.1 percent in 2007, according to market research firm Gartner Inc., which has revised its forecasts downwards after weak Q1 sales returns from the foundries.

Revenue was down by 12.5 percent sequentially in Q1 because of pricing pressure and an inventory overhang, leading Gartner to trim its chip market growth predictions to 6.4 percent in 2007 and by 8.2 percent in 2008.

For the foundries, it was the leading-edge process node that was hit hardest in Q1, with manufacturing capacity utilization at most of the 300mm fabs collapsing to slightly more than 60 percent in January, Gartner said.

Foundry revenue was $4.7 billion in Q1 compared with $5.4 billion in Q4 2006. While wafer shipments were down 3.8 percent, the average selling price dropped 9 percent as the mix moved away from the leading-edge.

Gartner predicted that foundry revenues would grow sequentially as demand recovers across the board from Q2 2007 onward.

"We estimate that the foundry market will grow 11.9 percent sequentially in Q2 2007, mainly because of inventory replenishment and a better pricing environment. When compared with the PC segment, demand from the communications segmentand to a certain extent the consumer segmentshowed greater strength and resilience in the initial stage of recovery," said Kay-Yang Tan of Gartner.

Wafer shipments are projected to be up 9.1 percent in Q2reaching 6 million 200mm equivalent wafers, lifting the foundries' fab utilization rate to 84.4 percent.

- Peter Clarke
EE Times Europe

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