Not surprisingly, consumer products will be the major drivers for global semiconductor sales, projected to grow at a compound annual growth rate of nearly 10 percent from this year through 2008, according to the Semiconductor Industry Association (SIA) today.

Worldwide sales of microchips are expected to reach $309 billion in 2008, an increase of 45 percent from $213 billion in 2004. This year, sales are forecast to increase by 6.8 percent to $227.6 billion, followed by increases of 7.9 percent to $245.5 billion in 2006, 10.5 percent to $271.3 billion in 2007, and 13.9 percent to $309.2 billion in 2008, the industry association noted.

“While Information Technology products will continue to be the largest market sectors for semiconductors, consumer products will be the major growth-drivers in the years ahead,” said SIA president George Scalise, in a statement.

“Advances in microchip technology are enabling a wide array of new products that have captured the imagination of consumers. Cell phones are rapidly evolving into multi-purpose personal information and entertainment devices. Pocket-sized MP3 players are incorporating video and gaming functions,” he explained.

“The conversion from analog to digital television is accelerating and will gain momentum over the next several years, especially now that Congress appears ready to set a date certain for the U.S. transition to digital broadcasting,” he continued.

“Consumers are now driving most of the advances in personal computers, which have become the hub of home technology. Fast-growing consumer markets are expanding demand for leading-edge products for digital signal processing, flash memory, and power management,” Scalise added.

The SIA noted that the fastest-growing major end-markets in 2006 will be PCs with a forecasted unit growth of 10 percent; cellular telephones at 13 percent; digital cameras at 9 percent; digital televisions at 52 percent; and MP3 players at 52 percent.

In 2006, microprocessors will grow slightly faster than the PC market, driven by a growing proportion of notebook computers that use processors with higher average selling prices than those used in desktop systems.

Flash memory is expected to grow 15.9 percent, driven largely by 23.5 percent growth in NAND Flash, used in products such as MP3 players and digital cameras. NOR flash is growing more slowly at 6.1 percent as cell phone manufacturers are using other types of memory devices, such as DRAMs and NAND Flash.

Digital signal processors (DSP) are projected to be the fastest-growing major segment of the semiconductor market with 17.2 percent growth in 2006. Strong growth in the cell phone market, the transition to 3G cell phones, and new uses for DSP chips in consumer products such as high-definition camcorders are the major drivers of increased demand, the SIA also said.

On the other hand, the SIA projects a 10.1 percent decline in DRAM device sales reflecting a relatively mild cyclical decline.

By: DocMemory
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