Memory fails the semiconductor market

20 Mar 2008

Growth in the semiconductor market in 2007 fell short of expectations, according to iSuppli, caused by weakness in the memory chip market.

Revenue in the semiconductor market worldwide grew by 3.3pc during the year, down on a preliminary estimate by iSuppli of 4.1pc growth in the global chip market in 2007.

Worldwide DRAM (dynamic random access memory) revenue fell by 19.1pc in the fourth quarter of 2007 compared to the third, a much more severe decline than the 4.7pc drop earlier predicted by iSuppli.

NAND flash revenue declined by 3.9pc in the same quarter, well below iSuppli’s previous forecast of 3pc growth.

This caused memory chip revenue in the fourth quarter to decline by 11pc sequentially, down from iSuppli’s prediction of 1.2pc growth in overall memory chip revenue.

ISuppli said its previous growth estimates were heavily influenced by the Q4 2007 revenue guidance presented by semiconductor suppliers in their communications with the investment community in October and November.

“This was a complete role reversal for memory semiconductors compared to 2006,” said Dale Ford, senior vice-president, market intelligence, iSuppli. “During the second half of 2006, memory IC (integrated circuit) revenues helped to prop up the growth of the overall semiconductor industry. In 2007, the poor results for memory chips restrained overall market growth.

“If memory were excluded from the revenue total, the semiconductor market would have grown by 2.4pc in the fourth quarter. However, due to the influence of the weak memory market, total semiconductor market revenues fell by 0.5 pc in the fourth quarter.”

By Niall Byrne