Chip market is cooking on back of strong sales
Semiconductor market predictions upgraded in face of changing economic situation
The chip market is healthy, according to the latest market figures, with some forecasts being upgraded to reflect a better economic situation on the back of strong sales.
According to the figures for May from the Semiconductor Industry Association (SIA), global chip sales were up by 9.4 per cent to $19.7bn, up from $18.1bn for the same period last year. Although desktop PC processor sales dipped by two per cent during the period, which the SIA blamed on the strong competition, notebook sales continued to thrive. PC sales are still better than originally forecast and have helped boost the sale of DRam memory chips. The real stars during May were consumer electronics products and mobile phones, according to the research.
George Scalise, president of the SIA, said: “Strong growth in sales of Nor flash memory products and optoelectronic devices are indicators of continued growth in sales of digital cameras and cell phones.
“Unit sales of PCs have continued to beat expectations, contributing to 13.7 per cent year-on-year growth in sales of DRam.
“We expect to see global semiconductor sales running nine to 10 per cent ahead of last year’s pace for the next several months. End-market demand, inventory levels, and capacity all indicate generally favourable conditions for the industry.”
Market watcher iSuppli also displayed optimism in the sector. It tweaked its 2006 semiconductor forecast. ISuppli’s predicted growth for 2006 has been revised to 7.9 per cent from 7.4 per cent, creating a market value of $255.7bn.
Gary Grandbois, principal analyst at iSuppli, said: “The rise in the 2006 semiconductor revenue comes despite a slowdown in the markets for electronic equipment. Worldwide electronic equipment revenue growth will decline to 6.8 per cent in 2006.
“However, electronic equipment demand remains strong and driven by the healthy PC, mobile phone and consumer-electronics markets.”