WSTS slashes 2008 growth estimate, stays firm on 2009, 2010 forecasts

The projected 4.7% year-over-year growth is down from November 2007 WSTS estimates for 9.1% growth in 2008, however, is still an improvement compared to 2007's worldwide semiconductor market of 3.2%.

By Suzanne Deffree, Managing Editor, News -- Electronic News, 5/28/2008

The World Semiconductor Trade Statistics (WSTS) group has become the latest chip market watching organization to lower its sales forecast for 2008, today slashing its predictions for global semiconductor market growth nearly in half to 4.7%.

According to the WSTS’ spring 2008 forecast (see chart below), the market is expected to reach $267.7 billion in sales this year. While the projected 4.7% year-over-year growth is down from November 2007 WSTS estimates for 9.1% growth in 2008, it is still an increase compared to 2007’s worldwide semiconductor market growth of 3.2%. WSTS said the lowered 2008 estimate comes on a weak Q4 2007, when sales were approximately $67 billion.

The Semiconductor Industry Association (SIA) earlier this month reported that based on WSTS data Q1 sales were $63.4 billion, 3.8% higher than $61.1 billion in Q1 2007, but 5.1% lower than $66.8 billion in Q4 2007.

Data from WSTS is also closely watched by researchers at Gartner Inc, who in April reminded that Q1 2007 sales declined about 6% quarter over quarter and a seasonal decline in sales in early 2008 should not be a cause for major alarm. Gartner in March had cut its 2008 semiconductor market growth estimate to 3.4% from 6.2%. 

Meanwhile, WSTS reported today that it saw no need to revise its future market development scenario significantly and is holding its 2009 and 2010 original projections at 5.8% and 8.8% growth, respectively.

"The WSTS foresees a continuously growing demand for electronic products such as PCs, digital consumer appliances, mobile communications, and last but not least automotive electronics, enhanced by the increase of semiconductor content per installed system," said Ulrich Schaefer, worldwide chairman of WSTS, in a statement. "These trends are expected to unfold in a challenging, yet generally healthy world economy."

The current WSTS forecast expects positive growth throughout the forecasting period, peaking in 2010. The group noted that while the forecasted semiconductor market does not show a pronounced cyclical pattern, some product groups maintain cycles similar to historical patterns. The group further noted that the Asia-Pacific region continues to be the fastest growing geographical area, due to the dynamics of both strongly rising domestic demand and the continuing manufacturing shift to this region.


WSTS spring forecast, May 2008