iSuppli trims chip revenue forecast for 2008

Semiconductor revenue growth in 2008 will be less than expected because of "global economic woes," according to iSuppli Corp. The research firm now predicts global semiconductor revenue will rise to $291.4 billion in 2008, up 7.5 percent from an estimated $270.9 billion in 2007, but down 1.8 percent from iSuppli’s September prediction of a 9.3 percent increase for the year.

Gartner, IC Insights and others have also reduced their forecasts in recent times.

iSuppli now predicts global semiconductor revenue will increase to $270.9 billion in 2007, up 4.1 percent from $260.2 billion in 2006. iSuppli in September predicted a 3.5 percent increase in annual revenue.

"The anticipated second-half surge in chip sales [in 2007] was stronger than expected for most semiconductor types due to increased demand and lengthening lead-times, creating a more stable pricing situation. However, memory chip revenue came in below expectations because of oversupply and declining prices in this product sector," according to the firm.

"Global semiconductor sales in 2008 will be negatively impacted by rising energy costs. Furthermore, the sub-prime mortgage crisis is dimming the economic outlook for the United States next year," according to the company. "iSuppli cautions that the potential arrival of a much-feared recession in 2008 could put a damper on this expected growth, and may scuttle the anticipated second-half recovery."

Semiconductor market conditions, especially memory, will be weak in the first half of 2008. Global chip revenue during the first six months of the year will decline to $135.9 billion, down 4.5 percent from $142.3 billion in the second half of 2007.

"The DRAM market is expected to undergo a pricing recovery in the second quarter of 2008, but NAND will not begin to rebound until the third quarter," according to iSuppli.

iSuppli has reduced its 2008 growth forecast for all types of electronic equipment. Global electronic equipment revenue is expected to rise to $1.6 trillion in 2008, up 6.6 percent from $1.5 trillion in 2007. This is down 0.4 of a percentage point from iSuppli’s previous forecast of 7 percent growth.

- Mark LaPedus
EE Times