Semico Research Corp. and a spin-off of that firm take divergent stances in their respective IC forecasts for 2007 and 2008.
The spin-off is more optimistic than Semico. Objective Analysis predicts the chip market will grow by 6.3 percent in 2007 and by 17.9 percent in 2008.
"The first quarter of 2007 was not as dire for the semiconductor industry as some have suggested," said Dave Cavanaugh, a former Semico analyst who is now with Objective Analysis. "Recent gains in new orders and low inventories of end-market electronics have already improved the pace of a slow-starting quarter. By the end of 2007, we expect revenues to grow to $272 billion, a 6.3 percent increase over a healthy 2006."
The firm bases its projections in large part on improved average selling prices (ASPs) for ICs. Foundry wafer demand will grow faster than capacity later this year, especially at the 65-nanometer node and below, Cavanaugh said.
In contrast, Semico (Phoenix) lowered its chip forecast for the second time in recent weeks and now says the IC market will grow a mere 1.8 percent in 2007, compared with the 9.2 percent increase seen in 2006.
"Unit growth is still strong,'' said Jim Feldhan, president of Semico. "But we've started the year with horrible pricing.''
Overall IC unit growth is projected to jump by 8 percent in 2007, but Semico expects ASPs to fall by 4 to 5 percent, he said. Semico originally though ASPs would decline by only 1 percent this year.
Semico still sees improvement in 2008, predicting growth of 15 percent.