IDC: Chips sales slow in ’07, but nearly double again in 2008

August 22, 2007 – Semiconductor sales should slow down in 2007 to a 4.8% clip after a 8.8% year-on-year increase in 2006, but will bounce back next year with 8.1% growth, and maybe better than that if demand remains strong and suppliers manage their capacity expansions, according to data from IDC.

The company says chip demand for PC and mobile phones remains steady, focused on low-end products and in emerging regions. Consumer demand is “lackluster,” but inventories have been brought down closer to balance, and volumes should rise again heading into the holiday season. DRAM and NAND flash sales are seen significantly lower this year after a punishing price drop in 1H07, while microprocessor sales will stay basically flat, the firm notes.

“While broadbase inventory correction for suppliers has bottomed out, pricing pressure will continue due to competition and volume growth coming from emerging regions which drive lower priced SKUs,” said Gopal Chauhan, program manager for IDC’s Worldwide Semiconductor Market Forecaster report, in a statement.

Looking longer-term, IDC says higher-end mobile phones with multimedia features will require increased semiconductor content, memory, and power management technologies, the firm notes. PCs will continue to trend toward more mobile and lower-priced form factors. Video processing capabilities proliferating across multiple consumer electronics devices will also drive semiconductor demand. Meanwhile, a growing trend of “personal content” (also implying multimedia) means an ever-growing need for more storage, notably NAND flash.


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