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Gartner sees slowing IC growth engines

Posted by iNext - 2005-11-17

Soaring oil prices and devastating natural disasters had no noticeable effect on the semiconductor market this year, but the engines for IC growth appear to be slowing down, according to the latest forecast from Gartner Inc.
Worldwide semiconductor revenue is forecast to reach $235 billion in 2005, a 6.9 percent increase from 2004 revenue. In 2006, the market is forecast to grow 7.6 percent, before a mild slowdown in 2007 with growth of 5.1 percent, according to Gartner (Stamford, Conn.).

The forecast is slightly different than that from the Semiconductor Industry Association (SIA), which released its new outlook on Wednesday.

"Semiconductor vendors remain conservative in their investment plans, which is enabling a continued gradual decline in supply-chain inventory levels and incremental improvement in manufacturing capacity utilization rates," said Richard Gordon, an analyst with Gartner (Stamford, Conn.), in a statement.

“Despite stellar growth in digital audio players and, by extension, NAND flash memory in the short term, there is somewhat of a void in semiconductor demand to be filled as the PC and digital cellular handset markets enter maturity,” according to Gartner.

“These two critical semiconductor applications, while benefiting from technology migration, are approaching saturation in terms of overall growth rates in system unit production and are, therefore, losing their ability to fuel strong growth in the semiconductor market,” according to the firm.

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