Growth of Integrated Circuits in 2006 was 8.7%; a major change is predicted for 2H-2007

February 2, 2007 – Saratoga, California – Worldwide revenues and unit sales of Integrated Circuits (ICs) in 2006 grew by 8.7% and 18.1% over 2005, respectively. However, the trend will change in 2007 as Underlying Demand for ICs is expected to peak in the second half of 2007. A period of overheating prior to the peak may cause this turning-point to occur earlier, alerts Advanced Forecasting, a semiconductor quantitative-forecasting house.

 “December 2006 sales of ICs declined, converging with the predicted Underlying Demand for ICs and somewhat mitigating the over-heating manifested by November sales,” said Dr. Moshe Handelsman, president of Advanced Forecasting, adding that, “nevertheless, the earlier over-heating will negatively impact the industry performance in 2007 like previous over-heatings have hampered market declines in the past.”   Advanced Forecasting predicts single-digit growth for IC revenues in 2007.

The increase of annual worldwide IC revenues in 2006 to 209.5B was heavily impacted by the robustness of consumption in the Asia-Pacific region, which grew by 12.4% year-over-year, and reaching $100.4B representing 48% of total worldwide IC revenues.

Worldwide IC unit sales in 2006 increased to 137.4B. All world regions shared a similar growth rate with respect to unit shipments in contrast to the diverse growth of revenues among regions.

Table 1: Growth of Total IC Sales

Region	Annual Growth Rate (2006/2005) %	2006 Annual Sales [B]
N. America $	10.0	41.0
Europe $	1.1	33.5
Japan $	4.8	34.7
Asia-Pacific $	12.4	100.4
Total WW $	8.7	209.5
N. America units	15.2	14.3
Europe units	19.1	19.1
Japan units	17.1	22.9
Asia-Pacific units	18.6	81.1
Total WW Units	18.1	137.4

 (Source of raw industry data: WSTS)

Notable among the high-growth IC segments was the DRAM sector.  Unit sales of DRAM densities of 256 MB or greater grew by 139%. Unit sales of Flash and revenues of SP Logic for the Other Consumer segment also stood out.

Table 2: High-Growth IC Segments Worldwide 

Segments		Annual Growth Rate (2006/2005)
DRAM 256 MB or Greater -	Units	139%
Special Purpose Logic - Other Consumer	$	120%
Flash NAND > 1GB	Units	105%
Microcontrollers - Wireless Cell Phones	$	93%
Total Actuators	Units	83%
Opto - Laser Transmitters	Units	64%
Microcontrollers - Computer Systems	Units	62%
Microcontrollers - 16 Bit	Units	61%
CCD & Other Image Sensors	Units	60%
Application Specific - IC Cards	Units	60%

 (Source of raw industry data: WSTS)

Founded in 1987, Advanced Forecasting is a leader in forecasting demand for semiconductors, semiconductor equipment by segment, and materials industries. Its unique specialties include using purely quantitative input and never retroactively modifying forecasts. Advanced Forecasting provides the industry’s most accurate forecasts and has acquired a user base of more than 400 companies worldwide.

Contact:

Dr. Moshe Handelsman

Advanced Forecasting

moshe@adv-forecast.com

Toll Free: 1.888.658.3227

  

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