Broad-based demand underpins brighter chip forecasts
Analysts speaking at a June breakfast seminar near Boston agree that current chip sales estimates are "conservative"—even after new optimistic forecasts—and strong demand is pulling the industry back into seasonal trends and more reliable growth patterns.
Gartner's newest forecast pegs 27.1% growth in chip sales in 2010 to $290B, vs. ~20% growth to $276B it forecast back in February. Bob Johnson, VP of research at Gartner, cited a list of factors underpinning the brighter outlook: better PC unit growth (22% vs. 20% in the previous forecast), MPU revenues (14.7% vs. 11%), DRAM revenue (78% vs. 55%), and cell phone units (14% vs. 12%). He noted that an upswing in memory is due to better pricing, not bit demand. Growth across several applications reveals "a more broad-based demand picture," he said.
Looking further out, better 2010 growth comes at the expense of 2011 and 2012, which Gartner now sees as slightly softer. Semiconductor growth is now clearly outpacing not only seasonal norms, but also the broader electronics systems market in general in terms of both inventories and pricing, he noted. This needs to get back in synch—supply shortages from memory to analog to foundries have boosted ASPs and inventories, so look for these to balance again in 2011, he said, and chip sales will realign to a long-term ~5%/year growth trend.
That high-20s growth for 2010 might not be enough, according to other analysts also speaking at the event. IC Insights' Bill McClean said his current outlook of 28% chip sales growth is "conservative," and "can easily go over 30%." The key is underlying strength of demand, namely PC units (particularly corporate purchasing). He also pointed to a return to trending for IC unit shipments at around 9%; some inventory buildup (e.g. in analog and special logic) "won't be a problem if we stay on a seasonal trend."
Semico analyst Jim Feldhan likewise characterized as conservative his 27% growth number for 2010, seeing possibly "a little above 30% if memory pricing holds," followed by a mild slowdown in 2012 and moderate single-digit growth in 2013-2014. Communications infrastructure will be a driving force in the next several years, as will an upgrade cycle for PCs and phones and in more robust varieties. Semiconductor content in end-markets continues to get richer, and a younger generation of users sees beefier devices with better technology as a necessity—not a luxury, he said.
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SMSC has qualified Kilopass' nonvolatile memory for auto ICs.
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IMEC has formed a Chinese division in Shanghai's Zhangjiang High-tech Park. Its first project: fine-tune its 65nm base process for government-backed chip firm Huali.
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Dow Electronic Materials has added a new R&D center in Korea (near Hwaseong).
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Aixtron has several new deposition tool orders from a trio of Chinese HB-LED firms.
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SMIC and Virage Logic have expanded their partnership to include Virage's IP on SMIC's 65nm low-leakage process technology.
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Contamination control equipment supplier SDI has moved its European operation to new larger premises in Breda, Netherlands.