Worldwide semiconductor sales forecast for 2008

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5 March 2008 News

Information from Databeans

It is no secret that the world’s economies have slowed down. With data trickling in for the fourth quarter, 2007 is shaping up to be a not so great year.

Retail sales are down, the housing market is in the tank, and the dollar has hit record lows. What does all this mean for chip suppliers?

There are several factors influencing the 2008 worldwide semiconductor forecast. In general, the replacement cycles for PCs and mobile phones should provide the semiconductor market with a needed boost in a volatile economic environment. With cautious optimism, Databeans predicts that in 2008, worldwide revenue growth for all semiconductor devices will be up 9% over last year, reaching a market size of $278 billion.

Replacement cycles have been very reliable, but what is difficult to predict is what percentage of the base will be replaced. With PCs, the world became synchronised somewhat about eight years ago in terms of purchasing, but the exchange period has dispersed somewhat. This just presents a longer replacement activity cycle, which provides for more consistent demand, albeit with typically flatter performance. Mobile phones tend to be replaced about every two years. Because of the price point of this application, and the rapidly changing functionality from one generation to the next, consumers replace their phones more often than any other electronic device.

Replacement may be prompted by forces outside the typical drivers, which are new software or OS (PCs) and new improved format standards (DVD electronics) for example. Consumers may replace phones because of a failing battery, or because it was damaged or even lost. Combined with the macroeconomic drivers, phone replacement should provide the market with momentum in 2008, despite slowing demand for other products.

With the possibility of economic recession looming in the US, most consumers have tightened-up spending, as seen in the data surfacing from the latest Christmas season. However, by presuming historical revenue shifts at a more conservative rate, due to the current environment, Databeans' model is currently predicting a better outcome than seen in other opinions - those that show greater bias toward the unfavourable macroeconomic news.

Worldwide semiconductor market forecast

For more information contact Susie Inouye, Databeans, [email protected]

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Worldwide semiconductor sales forecast for 2008

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