The latest forecast from leading market researchers Future Horizons is bullish about the coming year for the semiconductor industry.
Malcolm Penn has a great model, working down from the global macroeconomics to he specifics of the industry, right down to the silicon equipment and materials that are necessary to make the chips,and he makes a lot of sense.
He sees growth of 8% in the number of chips and 12% in the value of chips shipped. This is a good sign for the industry in one way, as it shows an increase in the average selling price, or ASP. This ASP had been falling, so although there were lots of chips shipping, there was less money around.
Now the downside is that these values are both less than the industry average. Good for returning to the average and avoiding the big ups and downs of the industry, but not good as it indicates we are on the way back down again after above-average growth last year. So much the same as last year.
Boom figures for 2006 chip sales
The Semiconductor Industry Association(SIA) reported that global sales of semiconductors reached a record $247.7bn in 2006, an increase of 8.9% from the
$227.5bn reported in 2005.
Worldwide sales in December were $21.7bn, up 9% on December 2005 (but down 3.6% on he previous month with all that manufacturing for Christmas).
"2006 was the 'Year of the Consumer' in the electronics industry," said SIA President George Scalise. "Sales growth was largely driven by popular consumer products such as cell phones, MP3 players, and HDTV sets."