Chip executives from three major companies — NEC Electronics Corp., Renesas Technology Corp. and Toshiba Corp. — separately forecasted 5 percent or less growth for the worldwide semiconductor market in 2007.

NEC Electronics and Toshiba also projected that the worldwide IC market could grow by 10 percent or more in 2008, but Renesas indicated that the market remains cloudy for next year.

The DRAM market remains mired in a major slump. NAND and NOR flash prices are soft, while ASICs, FPGAs, microcontrollers and microprocessors remain a mixed bag.

Some see a so-called ''Beijing effect'' on the horizon, which could drive chip growth into 2008. Satoru Ito, chairman and chief executive of Renesas (Tokyo), warned that several events — such as the collapse in the subprime mortgage sector in the United States and uncertainty in the currency exchange rates — pose some problems in the worldwide economy.

The mixed projections from executives are somewhat in line with the various market research houses. Last month, for example, iSuppli Corp. (El Segundo, Calif.) cut its forecast of global semiconductor revenue growth to 3.5 percent in 2007, down from its previous prediction of a 6 percent rise.

Weakness in sales in the first half of the year will not be offset by the current upturn in growth, the company said. The slowdown was caused by a sequential decline for DRAM and NAND-type flash memory, according to the research firm.

The market watcher predicted a rebound in the second half of 2007 and the expansion will continue through 2008. The total semiconductor market is expected to achieve a 9.3 percent revenue expansion next year, iSuppli said.

Junshi Yamaguchi, executive vice president and board member for NEC Electronics (Kawasaki), predicted that the worldwide IC market will grow by less than 5 percent in 2007, but the business will rebound and increase to the 10 percent range in 2008.

Japanese chip giant NEC Electronics somewhat lowered its forecast for 2007. In the beginning of the year, the company predicted that the IC market would grow by 5 percent in 2007 over 2006.

The market was hampered by a slowdown in the first quarter, but business conditions have improved in the second and third quarters. "Right now, the market is better," Yamaguchi told EE Times. "But fundamentally, it is not an exciting year."

The big question mark for NEC Electronics and others is the fourth quarter of 2007, where demand still remains uncertain at best, he said. The telling sign will occur during the peak chip buying season in November, he said in an interview at the company's headquarters.

There are some positive signs on the horizon, especially in PCs. Taiwan's motherboard production, which is a major indicator, appears to be growing by 35-to-40 percent in recent times, he said. Taiwan is the world's largest supplier of PC motherboards, according to analysts.

The automotive and wireless markets are growing, while the game-console chip business is booming at NEC Electronics and others. The Japanese chip maker supplies a custom device for Nintendo Ltd.'s popular Wii game machine.

In 2008, however, there are some concerns about the market in spite of the rosy forecasts. Many expect a surge in IC and flat-panel display demand before the Olympic Games in Beijing, China in August of 2008.

But after the event, there is a potential problem: an inventory glut and a slowdown in demand. "We see a danger of an inventory correction," Yamaguchi said.

By: DocMemory
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