The economic malaise in Europe and the US, along with the natural disasters around the world, have put a damper on 2011 semiconductor sales, according to Semico Research. Heading into the holiday buying season, the research firm observed that consumer confidence is low and inventories are higher than preferred. OEMs are cautious and in most cases, pessimistic about their markets, the firm added.
Semico expected a shakeout in the tablet market and anticipated slower economic growth; however, conditions in the third quarter prompted a downward adjustment to the forecast. In addition to the decline in ASPs and semiconductor revenues, units and wafer demand have been cut as well. Semico now expects semiconductor revenues to decline by 1.4% in 2011, but units and wafer demand will eke out single digit growth rates.
This year semiconductor units are expected to grow by 3.9% over 2010, Semicon said. Although that is a positive growth rate when compared to the 25% unit growth we experienced in 2010, anything below 10% feels anemic. The growth is also impacting product segments differently.
While NAND chips will continue to experience over 20% growth, DRAM units will decline by 1.6% in 2011, Semico estimated. DSP is another major product category seeing a dip in unit sales, but sales in the wireless communication category continues to grow by over 20%.
In 2011, demand for wafers processed at 45nm or smaller will increase to 24.0% of total wafer demand compared to 16.7% in 2010, according to Semico. Products processed on 45nm technology continues to be the sweet spot at the foundries. Ramp of 32nm at Globalfoundries has been on schedule; however, TSMC reported their demand for 28nm is slower than expected.