Integrated circuit demand, prices to rise in second half
As demand rises, semiconductor prices will head up
By Jim Carbone -- Purchasing, 4/10/2009 5:09:00 PM
The semiconductor market will rebound in the second half when integrated circuit (IC) shipments will be 23.7% higher than the first half, according to researcher IC Insights. The bad news for buyers is as demand picks up, chip prices will rise also.
About 73 million ICs will ship in the second half, compared to 59 million in the first half. In the first quarter, 28 million ICs shipped. IC unit shipments will rise through the year and in the fourth quarter 39 million chips will ship, according to the researcher.
One reason semiconductor demand will increase is seasonal increases in PC, cell phone, and consumer electronic system sales. In addition there will be a jump in IC orders due to inventory restocking.
IC Insights says the global economy is forecast to transition from negative to positive growth in the second half of 2009 which will help the semiconductor industry. One reason the economy will turn is more $2 trillion in worldwide economic stimulus funds is due to be spent over the next two years. At of end of March, less than 10% of the worldwide stimulus money had been spent, but more will be spent in the second half.
IC shipments will grow in 2010 because global recessions cause pent up demand for electronics, says IC Insights. With the recession over next year, demand will rise for equipment which will boost chip sales.
Buyers can expect higher chip prices next year because of severe cutbacks by chipmakers in capital spending in 2008 and 2009. As demand picks up, there won’t be enough capacity. Leadtimes should stretch and prices rise.
The increase in prices will be the driving force for IC market growth in 2010 an 2011.
Also see: Semiconductor demand falls in January
IC unit shipments soar
10/01/2009Chip Prices Dip In 09 As Well
01/14/2009Expect higher DRAM prices later in the year
06/17/2009
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