Gartner says the global semiconductor market will be worth US$269.2 billion (A$324.6 billion) in 2007, an increase of 2.5 per cent over 2006. The company had previously forecast growth for the year of 6.4 per cent.
Sales of semiconductors in the first quarter were more than five per cent lower than in fourth quarter 2006, a worse than expected decline that would normally be associated with the seasonal build-up in inventories at the end of the year.
“Since the beginning of this year, soft semiconductor market conditions have been exacerbated by sharply declining ASPs in key device markets such as DRAM, MPU and application-specific standard products (ASSPs),” said Gartner research vice-president Richard Gordon.
“It is likely that, despite continued unit growth in influential electronic systems markets, downward device ASP pressure will remain in place for much of 2007 as oversupplied semiconductor market conditions persist.”
The memory market is forecast to decline 4.7 percent in 2007 primarily due to a continued weakening of DRAM ASPs. Gartner’s latest forecast has DRAM revenue declining by 11.1 percent in 2007 to $30.5 billion, despite strengthening bit growth for the year.
The DRAM outlook for 2008 is for a mild revenue decline, again attributed to excess capacity and continued price declines. However, the 2008 outlook could improve if DRAM vendors adjust their current capacity plans, or if the NAND flash memory industry begins to see notably strong growth.
Gartner expects the worldwide semiconductor industry to return to modest annual growth of 8.7 percent and 7.2 percent in 2008 and 2009, respectively.
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