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Slow but strong growth expected for IC market

Posted: 20 Sep 2012 ?? ?Print Version ?Bookmark and Share

Keywords:IC Insights? IC market? EUV? 3D transistor?

IC Insights has revealed that the market for ICs is forecast to post much stronger average annual growth through 2021 compared to the average market growth in the past 15 years. Though IC unit growth is expected to slow, the IC average selling price (ASP) is expected to jump into the positive range, and help boost average annual IC market growth to eight per cent per year from 2011-2021, an increase of 54 per cent compared to the 5.2 per cent annual growth the IC market averaged in the period between 1996 and 2011, noted the market research firm.

Clearly, there are significant obstacles facing the industry including troubled global economies and numerous technology hurdles to improve the manufacturing process, yet IC Insights believes that IC market growth will improve despite these and other challenges.

IC unit shipments have been the foundation for growth in the IC industry in the past 15 years, averaging 9.5 per cent growth per year. Over the next 10 years, the average annual growth rate for IC units is forecast to slow to seven per cent per year as lackluster global GDP cools demand for electronic systems and integration results in more functions on a single chip.

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IC Market to show better Growth
Source: IC Insights

Offsetting slower unit growth is an upward swing in the IC average selling price, which is forecast to be the driver for IC market growth through 2021. IC average selling prices declined an average of four per cent annually from 1996-2011. However, through 2021, IC ASPs are forecast to increase by an average of one per cent per year, resulting in an eight per cent average IC market growth rate from 2011-2021.

Improving IC ASPs can be attributed to several factors. With no new entry-point opportunities, the IC industry is now closed to new major manufacturing start-ups. This will help moderate over-investment in new fabs. In addition, the fab-lite foundry movement should lead to less overspending for IC fabrication capacity. Likewise, after reaching 21 per cent in 2011, the ratio is forecast to decline to 19 per cent in 2012 and to 15 per cent by the end of the decade. Lastly, delays in moving production to 450mm will delay the next cost reduction phase for IC manufacturing (14nm, EUV, 3D transistor structure, etc.).

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