October 19, 2007 – Strong shipments of memory devices and automotive-related analog ICs are the main reasons why IC unit shipments will grow by double digits in 2007 (10%), continuing an “unprecedented” streak of six straight solid years of growth, according to data from IC Insights Inc.

Since 2002 IC unit shipments have grown by 10%-18% each year (see figure), and will grow another 10% in 2007, thanks to strong shipments of DRAM (49% growth) and NAND flash memory (38%), as well as data conversion devices (58%) and automotive-related analog ICs (32%), the firm notes. Only twice in the past three decades has the industry even seen three consecutive years of double digit growth: 1982-1984 and 1986-1988, both periods which were followed by significant dropoffs in IC unit growth.

But this time, things are different. “Average annual unit growth of 10% seems to be a ‘lock’,” the firm writes in a report, and it sees “a very good chance” that at least 10% annual growth will continue over the next 5-10 years, due to new and evolving applications in communications (cell phones) and consumer electronic systems (digital TVs, handheld computing, music, gaming devices, etc.), and surging IC demand from emerging regional markets.

Such reliably sustained expansion is “good news” for IC suppliers, who can count on running near or at full capacity, the firm notes. But it also means that there will be continued pressure on IC average selling prices (ASP), which will increasingly influence future IC market growth — e.g., a +/- 5% change in ASPs could push market growth to +5% or +15%, the firm notes.