As have many industry watchers, the SIA (Semiconductor Industry Association) dramatically downgraded its 2007 global microchip-sales-growth forecast from its earlier 10% estimate to 1.8% in recent weeks. The SIA notes sharp declines in ASPs (average selling prices) for microchips in key segments, including microprocessors and DRAMs, as prime contributors to the slower growth.

The recently lowered expectations are for sales, and, when you take lower ASPs into consideration, the supply-chain picture is more optimistic than it might seem. The SIA reports that the end markets that drive sales of these products continue to be in line with previous forecasts, keeping unit demand for semiconductors strong.

SEMI (Semiconductor Equipment and Materials International) concurs. “Unit growth for some key materials has been increasing since the early part of the first quarter. So, while revenue forecasts by some of the analysts have been downgraded, we’re starting to see growth for units in materials, and that corresponds to growth in demand for semiconductors,” said Jonathan Davis, a SEMI vice president, in the group’s June Voices of the Industry audiocast. The new SIA forecast projects total sales of $252 billion in 2007.