WSTS lowers semi industry growth forecast

By Colleen Taylor, Contributing Editor -- Electronic News, 5/30/2007

Add the World Semiconductor Trade Statistics (WSTS) group to the growing legion of semiconductor industry watchers downgrading the market outlook for 2007.

According to a spring 2007 forecast report released today from WSTS, the global semiconductor market is expected to grow 2.3 percent on an annualized basis to $253.5 billion this year, marking a slowdown after the group reported that the industry saw a growth rate of 8.9 percent in 2006. This 2.3 percent rate is below the projection of 8.6 percent growth the group issued last autumn, mainly, WSTS said, due to revenues in Q1 being lower than expected for almost all products.

Today's report wasn't all doom and gloom, however. The group said that in the second half of 2007 a "moderate recovery" is expected, and WSTS projects a 10.2 percent growth in 2008.

WSTS is just the latest of many market watchers that have recently released less than enthusiastic outlooks for the semiconductor industry's 2007 performance. Gartner Inc. Analyst Richard Gordon said this week in a research note that in the firm's forecast update due today, it is likely to make a slight downward revision to the market growth rate for the year from 6.4 percent to below 5 percent. Last month , iSuppli forecasted that global semiconductor revenue will rise to $281.4 billion in 2007, up 8.1 percent from $260.2 billion in 2006; the firm had previously predicted 10.6 percent growth for the year. Meanwhile, IC Insights lowered its expectations for full-year 2007 worldwide IC market growth a whopping 5 percentage points from 7 percent to 2 percent. The Semiconductor Industry Association, which in February projected 10 percent industry growth for 2007, is set to release an updated forecast on June 13.