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Market growth stalling?
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07/08/2006
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Despite predicting semiconductor sales would grow by 20% over last year’s, Future Horizon’s ceo Malcolm Penn has, reluctantly, revised his forecast. Now, he expects sales to have grown by 14% when the final figures arrive.
“Our forecast fundamentals however have not changed one iota; if anything, they are more robust. The economy is stronger, unit demand is high, inventory levels are not yet overheated, capital expenditure remains restrained and fab capacity is tight. Shame about the Intel price war,” he observed.
And it’s that price war that’s caused him to revise his prediction. Intel and AMD have been slugging it out recently, with some major price cutting ahead of new product introductions. Intel’s size means it drags the rest of the market downwards.
However, Penn says if you discount Intel – and Samsung’s flash performance – semiconductor sales grew by more than 4% in Q1 and Q2.
“The reduction (in our forecast) is in no way an indication of an overall market softening. Instead, it’s a reflection of the industry’s self destruct capability.”
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Author
Graham Pitcher
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