While the semiconductor industry is expected to reach the peak year of its present growth cycle, with double-digit growth expected, one research firm notes that the peak will be far below historical market peaks.
Worldwide semiconductor revenue will expand to $285.8 billion in 2007, a 10.6 percent rise from $258.5 billion in 2006 market research firm iSuppli said last week. After 2007, growth will decelerate to 8.7 percent in 2008 and then bottom out at 3.7 percent in 2009, before bouncing back to a 7.4 percent rise in 2010.
The projected growth is markedly slower than what the industry has seen in its strongest years of growth. The best year for chips was in 1995, when the World Semiconductor Trade Statistics group reported booming 42 percent growth. In 2000 and 2004 there was quick expansion in the market of 37 and 28 percent, respectively.
Factors contributing to the semiconductor marketâ€™s more moderate cycles include improved inventory practices, better management of manufacturing capacity and greater flexibility in memory production, said Gary Grandbois, principal analyst with iSuppli.
Semiconductor demand from all major applications will rise in 2007 compared to 2006. Areas seeing the strongest growth will be data processing, wired communications and consumer electronics.