iSuppli Reduces Its 2007 Semiconductor ForecastBut Sees Reasons For Optimism

EL SEGUNDO, CA—iSuppli Corp. has reduced its forecast of global semiconductor revenue growth in 2007 to 3.5 percent, down from its previous prediction of a 6-percent rise. Ironically, the downward revision comes at a time when chip revenue is up, the memory industry is improving, and the outlook for electronic-equipment markets is on the rise. However, these stronger conditions in the second half of 2007 will be insufficient to completely offset the impact of the first half’s weakness, spurring iSuppli’s forecast downgrade.

Global semiconductor revenue now is expected to rise to $269.9 billion in 2007, up 3.5 percent from $260.6 billion in 2006 (see figure). iSuppli issued its previous 6-percent annual-growth forecast in June.

Global semiconductor revenue declined by 6 percent in the first half of 2007 compared to the secondhalf of 2006, limiting the full-year market growth potential.

However, the second half is bringing a revival of growth, one that springs not only from the normal yearend seasonal strength, but also from a surge in memory IC prices and revenue and a stronger end-equipment market. For additional information, see

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