Semi Sales To Grow

Semiconductor sales will grow slightly in 2005 rather than stay flat as other market analysts have recently projected, according to market research firm iSuppli Corp. (El Segundo, Calif.)

During an interview with EETimes Thursday (Nov. 4), Dale Ford, vice president of market intelligence services for iSuppli, reiterated the company's September forecast calling for semiconductor sales to grow 9.6 percent over 2004. That forecast was cut from earlier projections of 11.8 percent growth next year, however.

Ford said iSuppli is continuing to project chip sales to grow slightly because memory sales will not decline as much as other analysts have predicted. Specifically, Ford said because memory suppliers now have to produce more different types of memory for different applications, they are less likely to produce an oversupply of one product type, such as DRAMS, that would lead to drastic price cuts.

"They (memory suppliers) don't have to flood the market anymore," said Ford. "In the past, memory suppliers would keep the lines running, now they can reallocate production capacity."

iSuppli is also sticking to its earlier forecast calling for 2004 chip sales to grow 25.5 percent over 2004, which lags behind the 28.5 percent projected by SIA and 28.8 percent by WSTS.Ford added that the magnitude of the inventory problems now plaguing many chip suppliers is no surprise.

"We didn't see the second half continuing the way the first half did," Ford said.