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IC and equipment to maintain growth in 2005 claims VLSI
The semiconductor equipment industry had its best year since 2000 in 2004, sales leaping by 52.5% to US$51 billion, according to new figures from market analyst VLSI Research.
The semiconductor equipment industry had its best year since 2000 in 2004, sales leaping by 52.5% to US$51 billion, according to new figures from market analyst VLSI Research.
The company is also forecasting growth in both equipment and semiconductor sales to continue next year, in defiance of the prevailing view that revenues will fall in 2005.
IC revenues will increase by almost 9% in 2005 while equipment sales will rise by 3.8%, the company believes.
"For a downturn to occur, normally there would need to be excesses such as higher inventories, declining IC prices, and declining RPSI (revenue per square inch of silicon produced)," said a VLSI spokesman.
"These conditions are currently either minimal or non-existent. Inventories have declined since the summer and IC prices have remained strong as we head into 2005."
The company also points to the steady rise in RPSI during 2004 as a reason for being optimistic about 2005. "Our analysis indicates that the industry remains healthy when this metric is above the level of $30 per square inch of silicon," said the spokesman. "In November, it was at a very profitable level of $41."
VLSI also believes that the industrys quick response to rising inventories has helped stave off a downturn in 2005.
"All in all, chip making is entering 2005 in a very healthy state and with very little unrealised capacity to buffer an upside surprise. Equipment will remain positive with low single digit growth," said the spokesman.
"The wild card is yield, which could drive utilisation down further than forecast, and so send equipment into negative territory."
The company is also forecasting growth in both equipment and semiconductor sales to continue next year, in defiance of the prevailing view that revenues will fall in 2005.
IC revenues will increase by almost 9% in 2005 while equipment sales will rise by 3.8%, the company believes.
"For a downturn to occur, normally there would need to be excesses such as higher inventories, declining IC prices, and declining RPSI (revenue per square inch of silicon produced)," said a VLSI spokesman.
"These conditions are currently either minimal or non-existent. Inventories have declined since the summer and IC prices have remained strong as we head into 2005."
The company also points to the steady rise in RPSI during 2004 as a reason for being optimistic about 2005. "Our analysis indicates that the industry remains healthy when this metric is above the level of $30 per square inch of silicon," said the spokesman. "In November, it was at a very profitable level of $41."
VLSI also believes that the industrys quick response to rising inventories has helped stave off a downturn in 2005.
"All in all, chip making is entering 2005 in a very healthy state and with very little unrealised capacity to buffer an upside surprise. Equipment will remain positive with low single digit growth," said the spokesman.
"The wild card is yield, which could drive utilisation down further than forecast, and so send equipment into negative territory."
