Chip business showing strong growth

CHIP manufacturers experienced strong sales in the first quarter of this year, but the downside is that could mean shortages ahead.

Market research firm Future Horizons said the first quarter showed far stronger growth than analysts had expected, with many of them scrabbling to revise their forecasts.

Growth, said Future Horizons, is now in the low double digit space. But, warned the firm, not all semiconductor firms are bathing in the sunny pastures. Malcolm Penn, principal analyst, said: "If your sales are not buoyant, you are either playing in the wrong space or you are suffering an execution issue."

Further, all this silver has a cloudy lining. Shortages are now inevitable. And individual company results show a wide variation, said Penn. His firm has analysed 74 firm accounting for 78 per cent of the market. He said: "The two chip market gorillas Intel (-12.4%) and Samsung (-11.9%) draggedboth the market and the 74 collective numbers down, their absoute size weighing heavily on the overall results."

He added that it remained to be seen how statistically strong the 2006 market will be. The consensus, he said, is still in the eight to 10 per cent growth range. Future Horizons has a much more bullish forecast of 20 per cent growth in 2006. µ

L'INQ
Future Horizons