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Electronics Production | March 20, 2008

Global Semiconductor market<br>suffers bad memories of 2007

A weak memory chip market in Q4/07 has hampered the global semiconductor market, causing growth in 2007 to fall short of expectations, according to iSuppli.
Global semiconductor market revenue grew by only 3.3% in 2007, based on iSuppli’s final 2007 results from their chip market share data. In a preliminary estimate released in November, iSuppli predicted the global chip market would grow by 4.1% in 2007.

Worldwide DRAM revenue fell by 19.1% in Q4/07 compared to Q3/07. This compares to iSuppli’s earlier forecast of a 4.7% decline. Meanwhile, NAND flash revenue declined by 3.9% in the same quarter, well below iSuppli’s previous forecast of 3% growth.

This caused memory chip revenue in Q4/07 to decline by 11% sequentially, down from iSuppli’s prediction of 1.2% growth in overall memory chip revenue. The previous growth estimates presented by iSuppli were heavily influenced by the Q4 revenue guidance presented by semiconductor suppliers. This poor performance in the memory market was significantly below industry expectations for Q4/07.

“This was a complete role reversal for memory semiconductors compared to 2006,” said Dale Ford, senior vice president, market intelligence, for iSuppli. “During the second half of 2006, memory IC 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 2.4% in the fourth quarter. However, due to the influence of the weak memory market, total semiconductor market revenues fell by 0.5% in the fourth quarter.”

Samsung Electronics, experienced a decline of 3.3% in its memory semiconductor revenue in 2007—contributing to a 0.8% decline in total chip revenue for the year. However, Hynix Semiconductor, Toshiba and Elpida Memory achieved memory-chip revenue growth of 15%, 14.5% and 8.8% respectively in 2007.

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