In-Stat: No big downturn near

By Suzanne Deffree, News Editor -- Electronic News, 4/18/2007

The good times will continue for the global semiconductor market's near-term future, at least according to one research firm.

In-Stat reported this morning that although the past five consecutive years of revenue growth and the cyclic history of the industry would suggest a reversal is overdue, growth will continue through next year.

Indeed, the firm reported that 2006’s record worldwide semiconductor revenue of $247.7 billion will grow 7.9 percent in 2007 to $267.3 billion on an extended period of above-average worldwide GDP growth. That growth will continue into 2008 and be followed by a “mild” downturn in 2009, In-Stat said, before returning to growth in 2010 and 2011.

“Over the long term, we expect that the industry will continue to experience revenue cycles, but that the cycles will become less extreme than they have been in the past and the long-term compound annual growth rate [CAGR] will be slightly below 10 percent,” said Jim McGregor, an In-Stat analyst, in a statement.

On that CAGR, In-Stat projected that the industry should surpass $300 billion in revenues in 2010 with unit demand expected to remain strong throughout the forecast period.

In-Stat’s forecast echoes similar upbeat estimates from industry watchers at the Semiconductor Industry Association, which is projecting 10 percent growth in 2007, and IC Insights and Semico Research, which are both setting their sights on 7 percent growth this year.

In-Stat is owned by Reed Business Information, the parent company of Electronic News.