In-Stat: Semi revenue to grow just 2.4%

In-Stat’s data projects worldwide semiconductor revenue is expected to grow to $261.9 billion in 2008 with the consumer segment expected to lead growth at 5.9%.

By Suzanne Deffree, Managing Editor, News -- Electronic News, 3/28/2008

In-Stat has become the latest market research company to forecast low single-digit growth for 2008 semiconductor revenue.

The Scottsdale, Ariz-based company is estimating revenue growth this year of only 2.4%, and said that while the semiconductor market in 2007 was characterized by excess capacity and high demand, 2008 will be characterized by better capacity balance, but softening demand.

According to In-Stat, the computer segment, which has seen its share trending downward since 2000, is expected to remain the largest semiconductor segment by a wide margin. However, by 2012, its share is forecast to be 41.8%, well below the 50% plus levels of the 1990s, the market research company reported.

"Declining MPU prices have joined DRAM price gyrations as a significant factor in computer segment annual growth," Jim McGregor, In-Stat research director and principal analyst, said in a statement.

MPU average selling prices and the volatile memory segment have been consistent themes among market researchers predicting low 2008 growth for the semiconductor market. Gartner earlier this month cut its estimates for 2008 semiconductor market growth nearly in half to 3.4% on a more-cautious demand-side outlook, much of which the firm said is being influenced by DRAM and NAND. ISuppli also earlier this month warned that it will trim its total 2008 growth forecast from 7.5% on signs of weakening pricing and reduced demand for NAND flash. And the IPC also released market data this month that shows electronics sales reflecting a hurting economy, with semiconductor shipments continue to slow down.

Bucking the trend is IC Insights, which said last week that it will wait for full Q1 data to be in before it determines if its current 9% IC market growth estimate needs adjusting.

In-Stat’s data projects worldwide semiconductor revenue is expected to grow to $261.9 billion in 2008 with the consumer segment expected to lead growth at 5.9%.

Looking ahead, In-Stat forecasted semiconductor revenue to be 7.4% in 2009, followed by 9.7% and 11.6% in 2010 and 2011, respectively.

In-Stat is owned by Reed Business Information, the parent company of Electronic News and EDN.