Simply put, semiconductors will be up and equipment is expected to fall in Q4. Overall semiconductor-equipment orders are projected to fall 10-to-15 percent in the fourth quarter, according to SG Cowen Securities Corp. (New York).
While the semiconductor-equipment market has been slowly losing steam,, ICs are finally gaining traction after a lackluster start this year.
The worldwide semiconductor market fell 2 percent sequentially in the first quarter and dipped another 2 percent in the second period, according to IC Insights Inc. (Scottsdale, Ariz.).
Seasonal demand is expected to push the worldwide IC market up 8 percent in the third quarter and another 3 percent in the fourth quarter, said Bill McClean, president of IC Insights.
McClean said IC revenue growth this year will match the 8 percent growth seen in 2005. Chip makers will see 9 percent growth in 2007, and then the cycle will peak with a 20 percent revenue increase in 2008, he said.
He listed a number of "positive factors" for 2006: strong cellular phone shipments, stronger-than-expected GDP in China and the United States and strong IC unit shipments.
He also listed some "negative factors" for 2006: oil prices, rising interest rates, slowing housing market, double ordering of ICs and increasing inventories.
The biggest concern: average selling prices (ASPs). Based on new fab capacity data, there will be no uptick in ASPs for ICs in the near term, according to IC Insights.