Wed, May 24, 2006 - Page 11 News List

Chip revenues expected to expand by about 12 percent next year, IDC says

By Lisa Wang  /  STAFF REPORTER

Chip revenue growth around the globe is expected to average at about a low double-digit percentage this year and next, helped by a voracious appetite for consumer electronics in emerging markets, market researcher International Data Corp (IDC) said yesterday.

"The market will continue to grow as demand is in good shape," IDC analyst Mario Morales said in Taipei.

Morales, however, warned that demand in emerging markets such as China, India and Eastern Europe would only drive volume growth rather than price, as demand would be for entry-level products.

"That will bring price pressure for semiconductor companies," he said.

Chip revenues would grow by roughly 9 percent to US$250 billion this year from US$230 billion last year, and then expand by a faster 12 percent to US$280 billion next year, Morales said.

Sales of chips used in consumer electronics -- memory chips in particular -- would expand more rapidly at around 13 percent this year to US$51 billion, compared with US$45 billion last year, on rising demand for bigger storage, according to IDC.

Sales are expected to jump to US$72 billion in 2010, IDC's statistics show.

The pace of growth for overall chip revenues would weaken to around 8 percent or 9 percent annually in 2008, and further slow to around 4 percent in 2009 before picking up in 2010, he predicted.

IDC's projection is similar to a forecast made by peer Gartner Inc, which expects chip revenues to increase by 10.6 percent this year to US$259.5 million.

Given a better-than-expected memory chip market, Gartner raised its forecast for chip revenues this year to US$259.5 billion, up 10.6 percent from last year.

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