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2011 forecast from Semico

Posted: 06 Jan 2011 ?? ?Print Version ?Bookmark and Share

Keywords:semiconductor industry? ASIC? NAND? DRAM?

Semico Research Co. reveals seven key predictions for the coming year

1. General economic outlook
Jim Feldhan, president, said: ''Despite what we hear from cable news networks, the world economy is performing better than most people perceive. China, India and other developing countries have strong growing economies. The U.S. economy will also see improved growth, with GDP approaching 3 percent in 2011. Japan and the EU continue to be sluggish but will improve in 2011.

One dampening effect to the overall economic growth is the recent rise in oil prices driven mainly by speculators trading oil futures with no intent in taking delivery; they are only pursuing short-term trading profits. The result is that we will likely see gasoline prices in the four dollar per gallon range in the U.S. market by midyear 2011. This will be one of the main reasons for U.S. GDP to be below 3 percent in 2011.''

2. Consumer outlook for 2011
Michell Prunty, senior consumer analyst, said: ''Consumer products, especially mobile tech, will continue to lead innovation in 2011. Two of the more interesting design trends we'll see include color digital paper and Near Field Communication chips. Mobile consumer will also see a shift towards a younger target market as new tablets focus on tots and innovating eBooks.''

2011 memory forecast
Sam Caldwell, memory analyst, said: ''What does NAND flash do for an encore in 2011? After a huge year in 2010, many fear NAND flash will be unable to sustain another year of growth. The flash segment revenues will be up 46 percent year over year in 2010, causing some to speculate that these highs, driven by healthy ASPs, are bound to drop.

However, Semico projects a stable pricing environment in 2011 as unit demand continues to grow from the emergence of more tablet PCs, more smartphones, and increased SSD penetration. Consequently, Semico projects 2011 revenues to be up 6 percent to $23 billion on increased unit demand and relatively stable ASPs.

Unfortunately, we do not expect the same encore from the DRAM segment. The DRAM pricing environment has already begun eroding in the fourth quarter of 2010. Semico expects revenues on the year will be down for the DRAM segment, 12.5 percent year over year. While not what the commodity memory manufacturers might have wanted, it's not all that bad given the 76 percent increase in 2010.''

4. Foundry outlook for 2011
Joanne Itow, managing director, said: ''Foundry suppliers logged in a record breaking year in 2010. The two largest dedicated foundries, TSMC and UMC each recorded more than 40 percent revenue growth over 2009. Capacity utilization was in the high 90's for most of the year. Capital expenditures were well over $10 billion with TSMC spending half of that amount. But what's in store for 2011?

In 2011, overall semiconductor units and wafer demand are expected to increase 14 percent and 11 percent respectively. It'll come as no surprise, the foundries will continue to grow at a faster rate than the overall industry. The largest foundries will continue to invest heavily in the first half of the year but it should taper off in the second half. If not, we will be in for a harder fall in 2012.''

5. Capex and fabs outlook for 2011
Adrienne Downey, director of technology research, said: ''Capital expenditures were up over 80 percent in 2010. It's reasonable to expect that spending will slow from that rate in 2011, and that appears to be exactly what will happen.

Bottom line, fabs will continue to be built, capacity will increase, and companies will need to migrate to smaller technology nodes. Apple will require more chips than ever, and other tablet PCs will need NAND and other semiconductors as well. Everything will just happen at a more moderate level in 2011.''

6. Micro logic 2011 preview
Tony Massimini, chief of technology, said: Micro logic finished out 2010 strong with 26 percent sales growth. However, this is because 2009 had fallen so low. A relatively more stable sales environment is expected in 2011 with 12 percent sales growth.

DSP will limp along. The cell phone market is maturing, but more significant is the growth products from Qualcomm, Broadcom and others that are not reported as DSP. MCUs will see healthy growth across all markets in 2011, especially automotive and industrial control. The 32-bit or greater MCUs will be the driving force. ML is dominated by MPU sales. There will be more technical advancements with MPUs in 2011, at both ends of the computing spectrum. Yes, the low-cost tablet and netbooks will continue to grow.''

7. Outlook for 2011 for ASICs and IPASIC market (gate array, standard cell and programmable logic) will see a growth rate of 11.5 percent to reach a combined total of $14.4 billion. The 3rd Party SIP market will grow 15.2 percent to reach $2.7 billion.

The SoC market will also grow 15.2 percent to reach $54.7 billion in 2011. First effort ASIC design starts will increase over 2010 by 6.8 percent, signaling a return to growth from the downturn of 2008-2009.''

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