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SIA: Semi Industry to Reach $321B in 2009
By Ann Steffora Mutschler -- Electronic News, 11/16/2006
Continuing to ride a strong wave of consumer demand for electronic products, Semiconductor Industry Association (SIA) president George Scalise said today during a webcast that global semiconductor sales will reach $321 billion in 2009.
Projecting a compound annual growth rate (CAGR) of 9 percent for the period of 2006 to 2009, the SIA reminded that total worldwide semiconductor sales amounted to $227.5 billion in 2005, now projected to reach $248.8 billion this year – up 9.4 percent.
Subsequently, the SIA expects increases of 10 percent to $273.8 billion in 2007, 10.8 percent to $303.4 billion in 2008, and 5.8 percent to $321 billion in 2009.
“Consumer purchases of a broad range of electronic products continue to grow as the leading driver of demand for semiconductors,” Scalise noted.
Traditional consumer electronics products, such as digital cameras, digital televisions, and MP3 player players now account for approximately 20 percent of total semiconductor consumption with the newest, most advanced consumer electronics products containing the highest semiconductor content.
Given that consumers are the principal buyers of cell phones, they are expected to drive another 20 percent of semiconductor sales.
“When consumer purchases of automobiles, personal computers, and other electronic products are taken into consideration, consumers account for more than half of all semiconductor consumption,” Scalise pointed out.
Unit sales of cell phones are expected to increase by more than 20 percent this year to more than 1 billion units, and considering that they contain an average semiconductor content of $41 per unit, the cell phone market is now the second-largest consumer of semiconductors, after personal computers, the SIA said.
Other fast-growing products include digital cameras with projected 11 percent unit growth, MP3 players with projected 35 percent unit growth, digital televisions with projected 56 percent unit growth, and personal computers with projected 10 percent unit growth.
“Consumer purchases of electronic products have also taken on increased importance as a driver of technology advances for the semiconductor industry. The highest-performance – and most expensive – PCs on the market today are not designed for corporate use, but for gaming enthusiasts who demand theatre-quality sound and graphics, which in turn require extremely high-performance microprocessors, graphics processors, and large amounts of the highest-performance memory available,” Scalise explained.
“Full-featured cell phones, with cameras, MP3 capability, TV access, and other new features, are also driving advances in chip technology. Consumers, who purchase the vast majority of cell phones, are demanding more and more features that in turn are increasing the semiconductor content. This is true even in developing markets,” he continued.
In China today, Scalise pointed out that nearly 90 percent of all GSM handsets have color screens, while more than 60 percent have cameras, and about half have MP3 capabilities.
Next year, the SIA said the industry can expect to see cell phones with global positioning satellite (GPS) capabilities. The addition of these features requires high-performance flash memory, DSP circuits, RG chips, and image-sensing devices.
By product segment, MOS logic devices continue to be the largest product sector. The forecast projects that sales of MOS logic devices will grow at a compound annual growth rate of 8 percent through 2009, driven by digital consumer products, wireless, and programmable products.
DRAM sales are projected to be the fastest-growing segment with a compound annual growth rate of more than 14 percent between 2006 and 2009. DRAM sales are expected to be especially strong for the remainder of this year and in 2007 as PC makers add memory to accommodate the Windows Vista operating system.
Digital signal processors (DSPs) are the second-fastest growing market segment, with sales projected to grow at a 13 percent compound annual rate through 2009. DSP sales are driven by continuing strength in the cell phone market and new consumer applications, such as high-definition camcorders.
Analog product sales, driven by industrial, wireless, and other portable electronic applications, are forecasted to grow at a compound annual rate of 11 percent through 2009.
The SIA’s forecast now breaks out NAND and NOR flash.
Sales of NAND flash are projected to grow at compound annual rate of 11 percent through 2009. Growth of NAND flash is driven by replacement of hard drives in consumer applications such as MP3 players and the requirements of portable storage media in applications such as digital photography. Laptop computers with pure NAND drives are projected to account for up to 25 percent of the laptop market by 2009.
Major Semiconductor Product Categories
Discrete products are projected to grow by 8.8 percent to $16.6 billion this year and to $19.9 in 2009, a CAGR of 6.9 percent. Discrete components include power transistors and radio frequency (RF) transistors that are found in wireless consumer products.
Optoelectronic device sales are projected to grow by 12.3 percent to $16.7 billion in 2006 and to $22.1 billion in 2009, a CAGR of 10.4 percent. Optoelectronics devices include image-sensors that are used in camera phone and digital still camera applications.
Analog sales are projected to grow by 16.8 percent to $37.3 billion in 2006 and to $48.6 billion in 2009, a CAGR of 11.1 percent. Analog is one of the most ubiquitous products, including power management solutions used in all electronic devices.
Microprocessor sales are projected to decrease by 5 percent to $33.2 billion in 2006 and grow overall to $41.9 billion in 2009, a CAGR of 4.7 percent. Microprocessors are the engines of personal computers and are used in embedded control applications.
Microcontroller sales are projected to grow by 3.5 percent to $12.5 billion in 2006 and to $15.3 billion in 2009, a CAGR of 6.1 percent. Microcontrollers are used in a wide variety of end-use applications, including automotive and process control systems.
Digital signal processor sales are projected to grow by 12.8 percent to $8.6 billion in 2006 and to $12.3 billion in 2009, a CAGR of 12.7 percent. DSPs are the engines of wireless communications devices.
MOS logic device sales are projected to grow by 4.6 percent to $60.3 billion in 2006 and to $78.8 billion in 2009, a CAGR of 8.1 percent. MOS logic includes standard logic, standard cell, field programmable logic devices, and a broad range of application-specific devices.
DRAM sales are projected to increase by 29 percent to $33 billion in 2006 and to $44.2 billion in 2009, a CAGR of 14.6 percent. The major application for DRAMs is in personal computers. DRAMs are also increasingly used in handsets.
Flash memory sales are projected to grow by 10.4 percent to $20.5 billion in 2006 and to $25.7 billion in 2009, a CAGR of 8.4 percent. NAND Flash is growing faster than NOR – NAND sales are projected to grow by 10.7 percent to $11.7 billion in 2006 and to $16.3 billion in 2009, a CAGR of 11.3 percent. Flash memory devices are used cell phones, digital still cameras, and a broad range of other applications.
Regional Market Forecast
