MP3 music players, multimedia/multi-purpose mobile phones, and home entertainment devices are expected to continue driving memory chip revenues in the coming years.
According to the Semiconductor Industry Association (SIA) in the United States, digital signal processing (DSP) devices for communication products will see the most significant growth (17.2%, reaching $9.1 billion) compared to all other chip types next year, thanks to the booming mobile phone and high-resolution camcorder markets.
Flash memory continues to be a “hot” commodity, led by NAND, which is integrated into MP3 players, digital cameras, and many other electronic products. Meanwhile, NOR flash, primarily used for accessing and running mobile phone software, will grow at a relatively slow pace.
In 2006, flash memory is expected to reach a growth rate of 15.9% (approximately $21 billion) following a successful 2005 with a growth rate of 16.1%. During this period, NAND revenue is projected to increase by 23.5% over the next 12 months, while NOR is expected to grow by 6.1%.
DRAM memory chips are anticipated to undergo a crisis, experiencing a 10.1% decline in global revenue, dropping to about $23 billion. This year, DRAM revenue has already decreased by 4.8%, yielding $25.6 billion.
The SIA reported that total processing device revenue in 2005 increased by 6.8%, reaching $227.6 billion, which is 0.8% higher than previous forecasts. Accordingly, the global semiconductor industry is expected to grow steadily for at least three more years, reaching a total of $306 billion by the end of 2008.
The SIA believes that end-user markets such as PCs will grow by 10% in 2006, while mobile phones will see growth of 13%. Home entertainment products like digital TVs and MP3 players are even expected to achieve outstanding success (52%).
The Asia-Pacific region is set to lead the semiconductor industry in the coming years with a growth rate of 16.4% and revenues of $103.3 billion. Following closely is Europe, with a growth rate of 11.4% and revenues of $115.1 billion.
This year, Japan’s processing device revenue decreased by 2.6%, down to $44.6 billion. Europe saw a slight increase of 0.1%, reaching $39.5 billion. However, the SIA predicts that Japan will recover immediately next year, with a growth rate of 5.2%, while Europe is expected to grow by 4.9%.
