Printed Circuit Design & Fab Online Magazine - IC Insights Downgrades 2008 Semi Forecast by $6B

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Printed Circuit Design & Fab Magazine

SCOTTSDALE, AZ – IC Insights Inc. has slashed its 2008 semiconductor revenue forecast by $6 billion, according to published reports.

The market research firm now expects the industry to grow 4% to $244.3 billion this year. In June, the firm predicted 2008 growth of 7% to $250.3 billion.

However, the firm said long-term trends would sustain pricing stability, resulting in a CAGR of 10.6% between 2007 and 2012.

This change is attributed to the inventory correction of the logic market and the pricing collapse of the NAND flash market.

Overall, IC unit growth is set to increase 8%, with average selling prices down 4% this year.

Long term, trends supporting reduced capital spending will help increase fab utilization rates, stabilizing chip ASPs, the firm says. Overall chip ASPs decreased 5% last year and 8% in 2006.

Overall, capital spending will decrease 18% this year as a result of leading chipmakers easing up on expansion, according to IC Insights.

Capital spending as a percentage of semiconductor sales will be roughly 17.5%, the lowest in five years. During the past four years, it has been between 20 to 22%, and historically has been 20 to 30% since 1995, says the firm.

For 2009, IC Insights expects semiconductor capital spending to be likely in the 8 to 10% range.

The revised forecast calls for the memory market to decrease 10% year-over-year, with the DRAM segment down 10%.

The firm now expects the logic market to increase 13% in 2008 after previously forecasting 16% growth.