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Forecasters pitch varied IC growth figures for '08

Posted: 17 Jan 2008 ?? ?Print Version ?Bookmark and Share

Keywords:2008 IC outlook? growth forecasts? market forecasters?

The IC forecast sweepstakes have officially begun this week as various market researchers touted their latest and greatest predictions at the Industry Strategy Symposium (ISS).

As usual, the forecasters were expected to agree!and disagree!about the outlook for 2008. And there is good and bad news for the industry: The IC market is projected to go up in 2008 after a relatively flat 2007, but capital spending is expected to decline by 10 percent or more this year.

The IC forecasts are all over the map in 2008, ranging from 6.2 percent to 12 percent growth this year, according to the market research houses that were expected to present their findings at ISS.

A question remains: Who will be right in 2008!and who will be wrong? Or does it really matter? In any case, here are the IC forecasts from various research houses right now:

  • Semico Research!12 percent
  • IC Insights!10 percent
  • SIA!7.7 percent
  • iSuppli!7.5 percent
  • VLSI Research!7.5 percent
  • Gartner!6.2 percent

    Now, the bad news: Don't look for a banner year for equipment. Here are the capital spending forecasts this year:

  • IC Insights!minus 10 percent
  • iSuppli!minus 10.6 percent
  • Gartner!minus 13.2 percent

    The most bullish IC forecast comes from Semico Research Corp. After a "correction year" in 2007, 2008 looks like an "expanding market" for semiconductors, said Jim Feldhan, president of Semico, in his ISS presentation.

    "2008 inventories [are] under control," Feldhan said. "Low inventories will contribute to stabilizing ASPs."

    In the presentation, he listed several drivers for the year, including an upgrade cycle for PCs, the shift towards digital broadcasting in the United States and continued design activity around the iPhone.

    Bill McClean, president of IC Insights, sees chip ASPs falling a mere 1 percent in 2008, versus a whopping 6 percent in 2007.

    McClean also forecasts that the IC market will grow 10 percent in 2008 over 2007. In 2007, the IC market grew 5 percent, according to IC Insights. IC unit shipments are expected to jump 12 percent in 2008, verses 11 percent in 2007, he said.

    For ICs and the economy in general, IC Insights lists several factors to watch in 2008: the U.S. presidential election, Olympics in China, Vista and the shift to the DTV standard in the United States.

    VLSI Research Inc. and iSuppli Corp. each see 7.5 percent growth for ICs in 2008 over 2007. In 2008, Dale Ford, an analyst with iSuppli, sees 0.2 percent growth in DRAMs, 9.8 percent growth in processors, 7.4 percent in analog and 18.9 percent growth in flash.

    In 2007, the DRAM market fell 3.9 percent, processors grew 1.9 percent, analog jumped 4.7 percent and flash went up 5.1 percent, he said.

    Poor picture
    On the capital spending side of the equation, the picture is poor. Fab-tool makers see a down year, but not to the extent of the horrific downturn in 2001.

    IC Insights projects that capital spending will hit $50.6 billion, down 10 percent over 2007.iSuppli reached a similar conclusion. Capital spending is projected to fall 10.6 percent in 2008, according to iSuppli.

    Overall capital spending is projected to hit $59.1 billion in 2007, up 4.9 percent over 2006, according to Gartner. Capital spending is projected to go into negative territory and fall by 13.2 percent to $51.3 billion in 2008, according to the research firm.

    Worldwide semiconductor capital equipment spending is forecast to total $44.8 billion in 2007, a 6.8 percent increase from 2006. The market is expected to hit $40.3 billion in 2008, down 9.9 percent.

    VLSI Research predicts that the IC-equipment market will hit $61.9 billion in 2008, down 2.8 percent from 2007.

    - Mark LaPedus
    EE Times

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