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Research firm forecasts strong 2011 IC sales

Posted: 11 Mar 2011 ?? ?Print Version ?Bookmark and Share

Keywords:IC market? January IC sales? semiconductor industry?

Market research firm IC Insights Inc. has suggested the revision of earlier forecasts of single-digit growth for the semiconductor industry in 2011.

According to data recently released by World Semiconductor Trade Statistics (WSTS), working IC sales in January amounted to $21.4 billion, up 16 percent compared to January 2010 and down only 4.5 percent compared to December 2010the smallest sequential decline between December and January since 1990IC Insights said.

According to IC Insights, the average sequential decline between December and January from 1990 to 2010 was 17 percent; between 1999 and 2010, that figure was even higher at 20 percent, according to the firm.

Using the actual January 2011 IC sales figure and incorporating the average sequential growth rate for February and March from 1999 to 2010 (3 percent and 28 percent, sequentially), IC Insights calculates that the chip market size for first quarter of this year would total $71.6 billion, up 14 percent from the first quarter of 2010. It would also represent a new 27-year high, according to IC Insights.

Even performing the calculation using actual January sales and the worst sequential changes to February and March since 1999 (a 7 percent decline in February 2007 and 19 percent growth in March 2005) would still lead first quarter market growth of 3 percent compared to the fourth quarter of 2010, IC Insights said.

With the recent positive news on the decline of the U.S. unemployment rate, an increase in U.S. factory orders and the global purchasing managers index figure remaining well above 50 early this year, it appears the IC market is set for another year of solid growth, IC Insights concluded.

Jan2011 IC forecast

But the firm noted that one significant potentially negative wild card for the IC market in 2011 is the price of oil, which has been rising in light of an uprising in Libya and other unrest in the Middle East.

If the price per barrel of oil averages around $100 or less in 2011, IC Insights believes the IC market will grow at least 10 percent in 2011, the firm said. But if the price of oil surges well past $100 per barrel and stays there it could dampen the current global economic recovery, according to the firm.

In recent days the price of crude oil has risen to nearly $105 per barrel on tensions in Libya, the world's 12th largest producer of crude oil.

IC Insights has been generally more bullish on the prospects for IC market growth in 2011. The company has been predicting market growth of around 10 percent since the beginning of the year. Most of its rivals are forecasting more modest growth of between 3 percent and 8 percent.

- Dylan McGrath
??EE Times

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