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Analog takes rare fall; bounce back of 15 percent expected in 2008, notes IC Insights |
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Sep 07, 2007 at 04:49 PM |
 Analog chip suppliers are expected to feel a slight chill this year, something they have not experienced since 2001, when everyone was reeling from the worst industry downturn on record. According to IC Insights, the analog IC market will decline by 2 percent in 2007, the first time in five years.
In its mid-year forecast, the market research is projecting sales slipping to $36.2 billion in 2007 down from $39.9 billion in 2006, when the market increased nearly 16 percent.
Inventory corrections in portable electronic products—especially cellular phones—and price erosion have negatively impacted a number of key analog market segments that rarely see down years, IC Insights said.
But the good times are to return soon with sales expected to increase 15 percent in 2008, which will push the market to a record-high $41.7 billion. Analog IC unit volumes are also forecast to hit record-high levels in 2008 with worldwide device shipments reaching 81.8 billion, up 13% from a projected 72.5 million units in 2007.
During the 2007-2011 forecast period, total analog IC revenues are expected to grow at a CAGR of 6.2% per year, reaching $49.9 billion in 2011.
Analog has become the cash cow of the semiconductor industry. An example is National Semiconductor that reported financial results yesterday, showing margins topping 60 percent on fab utilization rates that were once below 60 percent!
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