Gartner said it had cut its forecast for the semiconductor industry's 2007 performance to $269.2 billion, a 2.5 percent increase from 2006. In Gartner's previous forecast, it predicted a 2007 revenue increase of 6.4 percent.

The firm said that the sharp decline in optimism for the year's performance was due to more severe declines in DRAM average selling prices (ASP) than previously expected and continued price competition in the compute MPU segment. Gartner said semiconductor sales in Q1 were more than 5 percent lower than in Q4 2006, which was "worse than the expected decline" that would normally be associated with a seasonal build up in inventory levels at year end.

"Since the beginning of this year, soft semiconductor market conditions have been exacerbated by sharply declining ASPs in key device markets such as DRAM, MPU and application-specific standard products (ASSPs)," Richard Gordon, research VP at Gartner, said in a statement. "It is likely that, despite continued unit growth in influential electronic systems markets, downward device ASP pressure will remain in place for much of 2007 as oversupplied semiconductor market conditions persist."

By: DocMemory
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