SIA cuts industry growth forecast

The SIA said the cut was largely attributable to intensive price competition in three areas – microprocessors, DRAM and NAND flash – but also noted broader cost pressures, a function of silicon’s increasing dependence on consumer electronics. It also stressed that other sectors would maintain stronger growth. MOS logic is tipped for 5.7% growth this year and discrete for 2.9%, although analogue is flat at 0.1%. Perhaps more significant is the fact that, for the first time in recent memory, the SIA’s outlook is more pessimistic than those from other analysts such as Gartner Dataquest, WSTS and iSuppli. Usually, it is the other way around. However, market watcher iSuppli has now cut its forecast to 6%, but remains ‘optimistic’. According to its forecast, global semiconductor revenues will reach $276.6billion “Despite the strong price erosion,” said principal analyst Gary Grandbois, “the market is fundamentally sound. The end equipment market is still vital, with PC and handset unit growth expected to exceed 10%. Some modest slowing is being seen in some segments of the consumer and industrial electronics markets. But, on the whole, iSuppli expects that the electronic equipment market will grow by 6% in 2007. This will generate continuing demand that will keep semiconductor unit growth up and will generate decent single digit revenue growth in most segments besides memory and microprocessors.”