April 19, 2007 – Despite forecast reductions by analyst peers and historical comparisons suggesting a correction is overdue, In-Stat says semiconductor revenue growth will extend through 2008, followed by a mild downturn and then revving back up again in 2010-2011.
The group still projects 7.9% growth in chip sales to $267.3 billion this year, surging past $300 billion in 2010 with strong unit demand throughout the period. “Over the long term, we expect that the industry will continue to experience revenue cycles, but that the cycles will become less extreme than they have been in the past, and the long-term compound annual growth rate will be slightly below 10%,” said In-Stat analyst Jim McGregor, in a statement.
The semiconductor industry typically has a three- or four-year cycle between peak and trough, suggesting that the current string of five consecutive years of positive revenue growth is overdue for a correction — but an extended period of above-average worldwide GDP growth will maintain positive growth through this year and next, the firm believes. A downturn will happen in 2009 thanks to mild ASPs, but growth will return the following two years.