EL SEGUNDO, CA – Following three years of strong growth, the global electronic equipment market’s expansion will decelerate slightly in 2007, iSuppli Corp. predicts.

Electronics equipment revenues will grow 12% in the second half, to bring the annual growth to 6%, predicts iSuppli.

The past three years have seen a strong electronics equipment market, with worldwide revenue growing 11%, 8% and 7.7% in 2004, 2005 and 2006, respectively, says the firm.

The strongest growth has come from PCs, mobile handsets and consumer electronics products such as MP3 players and digital televisions.

However, the growth this year will slow to 6% as the wireless, consumer and industrial markets cool – even as the PC market revives, says Gary Grandbois, principal analyst with iSuppli, in a report issued today.

A minor slowdown in the PC market appeared in 2006, as the market for desktops flattened, even while mobile PC unit growth remained high. This strong growth for mobile PCs has continued this year with robust first-half demand that may put mobile PCs on track to repeat their 28% unit growth, says iSuppli. This year’s second quarter was something of a surprise for the PC market, with much stronger gains than typical.

Mobile handset growth remains vibrant and is expected to end the year with a 10% unit increase. However, revenue growth will be 5% as ASPs continue to decline, says the firm.

Semiconductor revenue for wireless communications grew by 14.2% last year, driven by 20.7% unit growth in handsets. The 2007 semiconductor revenue growth for wireless communications will be 7.7%, as the handset unit increase slows to 10%, adds iSuppli.

The frenzied demand for consumer electronic products during the past four years has slowed also, the company states; revenue growth for the consumer electronics market dropped by about one-third last year, to 9%. And it is expected that growth will decline by more than one-third this year, to 5.2% revenue growth as the market slows and ASPs continue to plummet.

The wired communications segment is expected to post 3.1% growth, and automotive electronics are expected to post a 3.9% increase, a weaker trend than seen in recent years, says the researcher.

The industrial market rebounded to 8% revenue growth last year, as the military/aerospace, medical and semiconductor manufacturing equipment markets grew strongly. But industrial market growth has flattened this year, especially in the semiconductor manufacturing equipment sector, and the total industrial market is expected to post 5.8% revenue.

Although first-half electronics equipment growth was down by nearly 6% compared to the last half of 2006, this is a fairly typical seasonal pattern; PCs, mobile handsets, and consumer electronics typically show much stronger growth in the second half, says iSuppli.

The normal exception is the industrial market, which typically grows more strongly in the first half, and 2007 will show the same pattern as the industrial market slows to 2% growth in the second half, from 4% in the first half.
 

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