Post a CommentConsumer spending to drive semi demand up 18% in 2008
By Ann Steffora Mutschler, Senior Editor -- Electronic News, 4/11/2007
Strong end market growth and stabilizing ASPs will combine to drive 2008 semiconductor revenue to $316 billion, representing a 17.9 percent growth in revenue over 2007, which is projected to increase by 6.3 percent over 2006 to $268 billion, according to market research firm Objective Analysis.
Dave Cavanaugh, director of manufacturing research for the firm said in a statement, “The first quarter of 2007 was not be as dire for the semiconductor industry as some have suggested. Recent gains in new orders and low inventories of end-market electronics have already improved the pace of a slow-starting quarter. In fact, by the end of 2007 we expect revenues to grow to $268 billion representing a 6.3 percent increase over a healthy 2006.”
The firm projects this increase in revenues for 2007 based in large part on improved ASPs.
Foundry wafer demand will grow faster than capacity later this year, especially at the 65-nm node and below, increasing foundry utilization rates and ASPs, the firm noted. This increase, coupled with greater demand in the communications and gaming end markets, will drive higher ASPs for logic and programmable devices.
A slowing in memory capacity additions will stabilize memory ASPs, especially those of NAND. Nearly all of 2007’s expected price declines will have occurred in the early months of the year.
Other factors driving Objective Analysis’ semiconductor revenue forecast include seasonally-adjusted consumer spending already indicating a resurgence in orders for electronics in February.
Further, the firm expects increased IC demand starting in Q4 to be driven by an upcoming cell phone upgrade cycle along with PC upgrades centered on Microsoft’s Vista operating system with its voracious appetite for DRAM.
A surge in high-definition TV sales in preparation for the 2008 summer Olympics will also boost semiconductor demand, along with regained consumer confidence driving an upsurge in electronics spending, combined with a projected return of global GDP growth to 4.3 percent in 2008 as well as a hotly-contested U.S. presidential race that will spur spending growth.
“We are optimistic for the industry in 2008. ASPs will stabilize and then grow in memory and programmable devices in 2007. Also, starting in late 2007, broad demand increase will develop in electronic end markets driving up logic ASPs and overall semiconductor revenue,” Cavanaugh added.
