SAN JOSE, Calif. Two market research firms Databeans Inc. and IC Knowledge Inc. disclosed that their respective semiconductor outlooks call for negative growth in 2005.
Total IC revenues are expected to fall by 2.7 percent this year, from $178.6 billion in 2004 to $173.8 billion in 2005, according to IC Knowledge (Georgetown, Mass.).
IC unit volumes are expected to grow, however. "We currently expect total IC units in 2005 to grow to 110.8 billion units from 104.9 billion units in 2004," said Scott Jones, president of the research firm. "Due to expanded available capacity primarily due to 300-mm, we expect utilization for 2005 to be in the mid-eighty-percent range versus the low-ninety-percent range for 2004, leading to a decline in ASPs from $1.70 for 2004 to $1.57 for 2005."
What a difference a year makes. "It almost goes without saying that 2004 was a huge growth year for the semiconductor industry," said Susie Inouye, analyst with research firm Databeans (Reno, Nevada). "Led by memory products and logic, the overall market was up an estimated 28 percent over the previous year. There were gains seen in every semiconductor category, from optoelectronics and sensors to MOS Micro and discretes."
Now, the mood is gloomy. "All of the excitement seems to have passed," Inouye said. "The semiconductor market needs to stabilize itself in 2005, by way of clearing the excess inventory built up from overspending."
For 2005, Databeans expects that the overall IC market will be flat, generating an estimated $212 billion in revenue, which would equal a minus 1 percent change from last year.
"That is assuming that this market will correct itself with a combination of sustained demand for computers and consumer electronics, and with reduced capital spending on the part of suppliers," she warned.
There are some bright spots. "China continues to be a region of focus for the semiconductor industry, as it will in the next few years become the largest market in the world, generating more semiconductor revenue than any other country or region. For example, as the U.S., Japan, and Europe bought have more cell phones and computers from China, the country's exports rose 33 percent in December of 2004, increasing the trade surplus to its highest level ever," she said.
Looking ahead into next year, the semiconductor outlook is brighter, with growth expected across all segments. Databeans considers 2006 a return to growth year, with that growth to be sustained well into 2007.