Analyst Raises Annual Chip Market Growth Forecast To 7%

One industry watcher has upgraded its forecast for global semiconductor market growth based on the strength of chip sales in May.



LONDON — Handelsbanken Capital Markets has upgraded its forecast for global semiconductor market growth from 3 percent to 7 percent after it has seen indications that chip sales were strong in May.

The market analyst firm is predicting the three-month rolling average of worldwide semiconductor sales for May, due to be announced by the U.S. Semiconductor Industry Association in the next few days, will be $18.42 billion up from $18.15 billion in April. This would result in actual monthly world chip sales being up 7 percent in May compared with May 2004, after actual sales in April 2005 were up 4.7 percent year-on-year.

However, Handelsbanken was over-optimistic in April, when it predicted $18.53 billion three-month average sales ahead of the SIA's announcement of the three-month average at $18.15 billion (see story).

The SIA's Global Sales Report is tabulated by the World Semiconductor Trade Statistics organization as a moving three-month average to reduce the swings due to reporting effects from different companies.

"Our early indicator is pointing to a strong number and possibly an upward revision to April's numbers. The April numbers seemed on the weak side, given Intel and Texas Instrument's strong guidance for Q2," the firm said Wednesday (June 29). Handelsbanken went on to say that it expected that both PC and handset chips are likely to show strong sales in May.

The firm said that shipments to Japan are likely to be a weak spot in the market as manufacturing of technology-based goods shifts from Japan to China.

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