After a flat year, semiconductor market expected to rebound

8 February 2006 News

Following a relatively flat year, in terms of semiconductor revenue, Databeans expects the market to strengthen on mounting demand for chips used in multiple segments, including several areas beyond typical computer applications.

The first quarter of this year should continue the positive momentum coming off of the fourth quarter, it says, which will pull up annual revenue growth.

In its January Newsletter, Databeans notes that the first quarter is seasonally strong for the more traditional semiconductor markets, including industrial and automotive. Further out into the year, it says, the consumer segment should add to this market energy, due in part to a replacement trend, in which consumers will upgrade existing products with new feature-rich gadgets. Combining this with increasing chip value in these products, 2006 should show double-digit revenue growth of close to 15% to $259 bn, while unit shipments are expected to increase to 564 billion units, up 24%.

Other segments that are expected to contribute include wireless, and data networking infrastructure, which should both factor in fairly evenly throughout the year.

Databeans expects that Year 2006 should see more improvement in tight inventory management, higher margins, and stable lead-times. It expects major suppliers to continue divesting lower margin businesses, while allocating resources for R&D and capital equipment investment. The signal acquisition and conditioning chain will continue to drive overall revenue in 2006, with strong revenue growth expected for sensors, power management, mixed-signal, and RF products.

www.databeans.net

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