Semi market growth rate to double in next five years

According to market research firm IC Insights, the NAND flash memory market will have the highest average annual growth rate among the major product segments, increasing 16.6% annually, slightly ahead of its 16% average annual growth rate from 2006 to 2011. Elsewhere, the dram market is forecast to show a healthy turnaround by growing 9.6% annually through 2016, reversing a five year span in which average growth declined. IC Insights predicts that increasing sales in these two market segments will help to more than double the growth rate of the total semiconductor and total IC markets through 2016 as compared to the 2006 to 2011 time period. Other key markets like microprocessors and the analogue market are expected to enjoy a modest increase in average annual market growth through 2016. Meanwhile, total market growth for optoelectronics, sensors, and discrete devices is forecast to outperform the IC market by averaging 10.6% annual growth compared to 7.4% for ICs. IC Insights' mid year update shows that devices such as tablet computers and smartphones will keep semiconductor units growing at a steady pace through 2016, but strengthening average selling prices will be the main driver behind improving market conditions. With many semiconductor companies closing their doors and others that are merging or being acquired, the research firm says fewer players have the capital resources required to build new 300mm wafer fabs. Consequently, it believes the chance of an overcapacity situation throughout the industry will be reduced. The outcome is expected to be steadily upward trending average selling prices through 2016, compared to the 3% annual decline in average selling prices between 2006 and 2011.