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iSuppli has "trimmed" its IC forecast for 2005. The market researcher sees a slowing in world semiconductor revenue growth in H2 2004, with the main impact in Q4.
iSuppli has "trimmed" its IC forecast for 2005. The market researcher sees a slowing in world semiconductor revenue growth in H2 2004, with the main impact in Q4.

Sales in H1 showed a 31.4% increase over H1 2003. This is expected to fall to 20% for H2 2004/H2 2003. For the year, the growth prediction has been increased to 25.4% from 24.4%. In 2005, iSuppli expects single-digit growth of 9.6%, down on its previous expectation of 11.8%.

The market researcher comments: "The rapid decline in semiconductor industry growth is due to softening prices for chips as well as to a slowing in the electronic equipment markets, which drive chip sales. Revenue growth in the electronic equipment market will slow to 5.8% in 2005, down from 9.8% in 2004."

The "major culprits" in this are seen to be mobile phones and notebook PCs, but there is a "general deceleration in the electronics market", according to iSuppli on the basis of a "tentative global outlook and the weakening of consumer upgrade purchases". The market researcher believes that supply came into balance with demand in early 2004, but that price erosion will result from slackening demand later this year. These developments will be a major factor impacting 2005.

The World Semiconductor Trade Statistics (WSTS) organisation reports July 2004 IC sales at $17.997bn (three-month average), a 37.9% increase on July 2003. Europe's IC use came to $3.164bn (+27.7%) or, in Euros, EUR2.608 (+21.5%). Other regions: Americas $3.295bn (+29.0%), Japan $3.904bn (+23.3%), Asia-Pacific $7.634bn (+57.3%). The European Semiconductor Industry Association (EECA-ESIA) comments: "The outlook for 2004 is still very bright."

Gartner analysts see a 40% reduction in the number of IC sellers within ten years. The number has increased to 550 in 2003 from 120 in the mid-1980s, according to Gartner. "Increasing costs and complexity of design, increased system content and greater flexibility means fewer vendors will have the capability to supply chips in the future," says Gartner vice-president Jim Tully. Tully also sees increasing standardisation of the chips produced in large facilities. Customisation will take place after manufacture for specific applications. Standardisation will also see the number of chip manufacturers reduced.

The Information Network forecasts a compound annual growth rate (CAGR) for high-density packaging of 35.7% to 703.3mn units in 2006. Such packages include multi-chip modules (MCM), multi-chip packages (MCPs) and systems-in-packages (SiPs). Communications products will continue to dominate the application market - 80.2% in 2001, declining only slightly to 77.5% in 2006.

SEMI's International Statistics on Vacuum Technology (ISVT) working group reports world sales for vacuum components and equipment sub-systems at $2.6bn in 2003. The leading sub-sector was for semiconductor process vacuum, representing 38% of the total. The study included other sub-sectors such as industrial vacuum (12%), process vacuum (12%), instrumentation (11%) and non-semiconductor thin-film deposition (10%).

Strategy Analytics forecasts a 6.5% compound annual growth rate in gallium arsenide microelectronics over the 2003-2008 period, based on a start market of $2.7bn and ending with $3.7bn. The substrate market (bulk and epi) will see sales move from $387mn to $541mn giving a CAGR of 6.9%. "Overall market growth for GaAs devices will continue to be dependent primarily on the wireless markets, with the cellular handset market being the primary driver," notes Asif Anwar, Strategy Analytics' GaAs service director. "The cellular market represented over 41% of the total demand for GaAs devices in 2003. Demand from other applications, such as automotive radar, will increase, but cellular handsets will still account for at least 33% of the GaAs device market in 2008."

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