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To: Return to Sender who wrote (29884)	4/10/2006 2:35:24 AM
From: etchmeister	Respond to of 95616

A double bottom is better than a real bottom and it's even better than a downrurn (the memory spot price index is higher compared to 4 to 5 months ago: dramexchange.com ) iSuppli upgrades 2006 semiconductor forecast Printer friendly Related stories Comments Email to a friend Latest news Press release; Michael McManus, DigiTimes.com [Friday 7 April 2006] Improving conditions in the memory market have cast a more positive light on the semiconductor industry’s outlook for 2006, prompting iSuppli to upgrade its chip revenue forecast mildly for this year. Worldwide semiconductor revenue will grow to US$254.7 billion in 2006, up 7.4% from US$237.1 billion in 2005, iSuppli predicts. iSuppli's previous forecast, issued in January, called for a 6.8% increase in global semiconductor revenue in 2006. DRAM recovery The major factor behind iSuppli’s revised outlook is the improving condition of the DRAM market, which will account for more than 10% of worldwide semiconductor revenues in 2006. In contrast to 2005, when DRAM revenues contracted by 6.2%, sales in this area will rise by a corresponding 6.2% in 2006, growing to US$26.4 billion, up from US$24.8 billion in 2005. Accelerating growth in bit production, and slowing declines in average selling prices (ASPs) compared to 2005 will help the market to expand in 2006. While revenue growth in the second-largest segment of the memory business, NAND flash, will decelerate in 2006, it will still generate a healthy increase, growing to US$13.8 billion, up 29% from 2005. In contrast, NAND revenue rose by 62% in 2005. A double bottom for chips With growth of 3.6% in 2005, and 7.4% in 2006, the semiconductor market is experiencing a “double bottom,” where during a period of two years growth is lagging the overall semiconductor Compound Annual Growth Rate (CAGR) of 8.2% from 2005 to 2010, according to Gary Grandbois, principal analyst for iSuppli. It had been debated for some time whether 2005 or 2006 would be the bottom year in the downside of the silicon cycle; in fact, it appears that both 2005 and 2006 will represent an extended two-year period of moderate growth before the market returns to double-digit growth in 2007, Grandbois said. iSuppli forecasts worldwide semiconductor revenue will rise to US$285.2 billion in 2007, up nearly 12% from 2006. Equipment breakdown Despite the rise in semiconductor revenue in 2006, the growth rate for sales of electronic equipment that uses chips will slow compared to 2005. Worldwide electronic equipment revenue will rise 5.9% in 2006, compared to 7.8% in 2005. No major segment within the electronics equipment industry in 2006 will achieve double-digit revenue growth, in contrast to 2005, when consumer-electronics was the lone equipment area to rise by 10% or more. The biggest slowdowns in 2007 will come in the consumer electronics and wireless equipment segments. Revenues in the worldwide consumer-electronics equipment market will rise by 6.7% in 2006, down markedly from 13.1% in 2005. Factors including economic issues, high household penetration rates, lengthening consumer replacement cycles and the convergence of different pieces of equipment are slowing consumer-electronics sales increases. Meanwhile, reduced growth in unit shipments of mobile phones will cause wireless communications equipment revenue growth to slow to less than 1% in 2006, down from 6.4% in 2005. Electronic equipment revenue growth will accelerate in 2007 to 7.1%, with wired communications, wireless communications, consumer electronics, automotive and industrial gear all generating increased revenue growth compared to 2006.