Business & Finance
News
6/22/2007
03:54 PM
Connect Directly
RSS
E-Mail
50%
50%

iSuppli Cuts Semiconductor Revenue Forecast

Global revenue is expected to increase 6% to $276.6 billion this year from $260.9 billion last year, the firm said.

Market researcher iSuppli is estimating a lower 2007 revenue forecast for the semiconductor industry, due in part to plunging prices for memory chips.

Global revenue is expected to increase 6% to $276.6 billion this year from $260.9 billion last year, the firm said. ISuppli in April had predicted an 8.1% jump.

The latest projection remained well above the roughly 2% increase predicted by other researchers, reflecting a general optimism on the part of iSuppli. Nevertheless, weaker-than-expected conditions in the first quarter made the correction necessary, the firm said.

Those conditions included plunging prices for memory chips combined with a significant inventory correction that resulted in a 6.2% revenue decline from the fourth quarter. While both events were expected, iSuppli had forecast only a 5.4% decline in revenue in the quarter.

Nevertheless, iSuppli believes the market is "fundamentally sound," iSuppli analyst Gary Grandbois said in a statement. PC and handset unit growth is expected to exceed 10% this year, while the electronic equipment market is expected to rise by 6%. Further boosting the semiconductor market is an expected slowdown in price erosion in the second half of the year

"Many of the recent pessimistic semiconductor forecasts arise from analysts extrapolating that weak pricing conditions in the first quarter will persist throughout the entire year," Grandbois said. "iSuppli's more optimistic outlook reflects our view that pricing conditions will improve in the second half."

ISuppli predicted the market would grow by 8.8% next year, dropping to 2.7% in 2009 because of a combination of weakening markets, overcapacity, and price erosion.

Comment  | 
Print  | 
More Insights
The Business of Going Digital
The Business of Going Digital
Digital business isn't about changing code; it's about changing what legacy sales, distribution, customer service, and product groups do in the new digital age. It's about bringing big data analytics, mobile, social, marketing automation, cloud computing, and the app economy together to launch new products and services. We're seeing new titles in this digital revolution, new responsibilities, new business models, and major shifts in technology spending.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Tech Digest - August 20, 2014
CIOs need people who know the ins and outs of cloud software stacks and security, and, most of all, can break through cultural resistance.
Flash Poll
Video
Slideshows
Twitter Feed
InformationWeek Radio
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.