Semiconductor growth rates to improve long-term

Aug. 10, 2012
New report says average annual growth rates will more than double across many segments in the next five years

Average annual growth in the semiconductor market is on the rise, according to a recent report from market research company IC Insights. The group’s Mid-Year Update is forecasting a considerable upturn in the market over the next five years.

For the NAND flash memory market, in particular, average annual growth from 2011-2016 is forecast to remain strong, the report says.  NAND flash is forecast to have the highest average annual growth rate among the major product segments, increasing 17% annually, slightly ahead of its 16% average annual growth rate from 2006-2011. The DRAM market is forecast to show a healthy turnaround, as well, by growing nearly 10% annually through 2016; this reverses a five-year span in which average growth in the market declined. IC Insights says increasing sales in these two segments will help more than double the growth rate of the total semiconductor and total Integrated Circuit (IC) markets through 2016.

The report also shows that other key markets such as microprocessors and analog are expected to see a modest increase in average annual growth over the next five years. In addition, total market growth for optoelectronics, sensors, and discrete devices is forecast to outperform the IC market by averaging close to 11% annual growth compared to 7% for ICs.

In line with other analysts’ expectations, this latest report also indicates that rising demand for wireless devices such as tablet computers and smartphones will drive semiconductor growth over the next several years.  The report also points to strengthening average selling prices as the main driver behind improving market conditions.

“With many semiconductor companies closing their doors and others that are merging or being acquired (for example, Micron’s pending acquisition of Elpida), fewer players have the capital resources required to build new 300mm wafer fabs,” the report says. “Consequently, the chance of an overcapacity situation throughout the industry (and the associated steep price declines it often creates) will be reduced.  The outcome is expected to be steadily upward-trending average selling prices through 2016, compared to the 3% annual decline that ASPs averaged between 2006 and 2011.”

About the Author

Victoria Fraza Kickham | Distribution Editor

Victoria Kickham is the distribution editor for Electronic Design magazine, SourceESB and, where she covers issues related to the electronics supply chain. Victoria started out as a general assignment reporter for several Boston-area newspapers before joining Industrial Distribution magazine, where she spent 14 years covering industrial markets. She served as ID’s managing editor from 2000 to 2010. Victoria has a bachelor’s degree in English from the University of New Hampshire and a master’s degree in English from Northeastern University.

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