Analog IC market to slip 2% in 2007, firm says

By Colleen Taylor, Contributing Editor -- Electronic News, 9/7/2007

The analog integrated circuit (IC) market  is on track this year to break a five-year streak of consecutive revenue gains: according to market research firm IC Insights' mid-year update report, the IC market is expected to decline for the first time since the 2001 semiconductor recession.

The firm's mid-year forecast shows analog integrated circuit sales declining 2 percent to $36.2 billion this year, down from $39.9 billion in 2006, when the market increased nearly 16 percent, which is significantly less enthusiastic than reports from research firm iSuppli Corp.; in June, iSuppli forecast that the global analog IC revenue would grow 10.1 percent year-over-year this year to reach $47.5 billion.

IC Insights also forecasts, however, that the industry's current slump will be brief. Analog IC sales are expected to rebound in 2008 with a 15 percent increase, which will push the market to a record-high $41.7 billion next year, the firm believes. 

Also forecast to hit a new record in 2008 are analog IC unit volumes, with worldwide device shipments reaching 81.8 billion, up 13 percent from a projected 72.5 million units this year.  Analog IC unit growth device shipments are expected to rise by 4 percent this year compared to an annual average increase of 16 percent per year during the 2002-2006 timeframe, IC Insights said.

The application-specific analog IC segment is forecast to decline 6 percent this year to $22.1 billion. In the 2002 to 2006 period, application-specific analog sales increased at a cumulative average growth rate (CAGR) of 11 percent per year. Meanwhile, standard analog IC sales are expected to grow four percent to $14 billion in 2007, after increasing at an annual average of 8 percent per year in the 2002 to 2006 period.

Looking further ahead, during the 2007 to 2011 forecast period, total analog IC revenues are expected to grow at a CAGR of 6.2 percent per year, reaching $49.9 billion in 2011, according to IC Insights. Standard analog IC sales are forecast to reach $18.2 billion in 2011, while application-specific analog revenues will total $31.7 billion that same year.