The two per cent revenue growth for the 2007 chip market predicted by analysts is too pessimistic, market watcher iSuppli has claimed.
Although iSuppli has trimmed its own earlier forecast of 8.1 per cent for 2007, it is still predicting growth of six per cent. The analyst said plunging prices and significant inventory clear-outs resulted in a 6.2 per cent drop in revenues for the first quarter, but this would even out as the year progressed.
Gary Grandbois, principal analyst at iSuppli, said: “The memory downturn and inventory reduction had been anticipated by iSuppli. However, we expected these factors to drive only a 5.4 per cent decline in revenue for the quarter. With our dreary expectations having been exceeded, iSuppli has reduced its 2007 forecast by 2.1 percentage points. Many of the recent pessimistic semiconductor forecasts arise from analysts extrapolating that weak pricing conditions in the first quarter will persist throughout the entire year. iSuppli’s outlook reflects our view that pricing conditions will improve in the second half.”
ISuppli claimed the rest of the chip market is stable and that the market will rebound from the Q1 crash.
Grandbois said: “Despite the price erosion, the market is fundamentally sound. The end-equipment market is still vital, with PC and handset unit growth expected to exceed 10 per cent. On the whole, we expect that the electronic equipment market will grow by six per cent in 2007. This will generate continuing demand that will keep semiconductor unit growth up and will generate decent single-digit revenue growth in most segments besides memory and microprocessors.”
In related news, a new DRam player has announced that it is setting up shop in the European market.
DRam and Flash maker, ATP, has announced that it is opening a series of European sales offices in the UK, the Netherlands and Germany, and seeks to expand its partner base.
Neil Hall, ATP Europe managing director, said: “ATP has been manufacturing and bringing to market an extensive line of high-density, high-reliability DRam memory modules and flash memory products for over 15 years. We are looking forward to having an opportunity to work more closely with our partners in the European marketplace.”
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