(December 1, 2010) — The recent difficulties in semiconductor sales and the unusually rapidly declining IC price/performance index are slowing semiconductor equipment demand. As a result VLSI research has revised its 2011 and 2012 forecasts for both integrated circuits (ICs) and semiconductor equipment. Essentially, 2010 has been a 2-for-1 deal for both chips and equipment with two years of growth in one year, resulting in overcapacity and declining chip prices, says VLSI.

IC forecast

IC sales are now expected to increase only 4.4% in 2011 to $248.6 billion, while 2012 will accelerate with an IC sales growth rate of 7.9%. VLSI Research cites the increasingly difficult pricing environment, resulting from the rapidly increasing production capacity as the major contributor for sluggish sales growth in 2011. This is not only limited to DRAM markets but also other major IC sectors as well.  Also read: Utilization slips, but still high in Q3

Semiconductor equipment forecast

VLSI Research has also downgraded the 2011 forecast for semiconductor manufacturing equipment.  Equipment sales are expected to decline 5% in 2011 to $46.3 billion. 2012 will bring a recovery to semiconductor equipment demand as sales are expected to reach $49.7 billion, 7.2% growth. Semiconductor equipment demand is slowing due to excess supply in DRAM markets and VLSI expects other major segments to experience a flat year in 2011. Also read: Seasonal softening now controls chip tool demand

VLSI Research inc provides market research and economic analysis on the technical, business, and economic aspects within nanotechnology and related industries. Learn more at https://www.vlsiresearch.com

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