IC and equipment to maintain growth in 2005
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 nonexistent. 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 industry's 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,” said the spokesman.
