45nm and Below Grabs 24% of Wafer Demand in 2011 says Semico

Phoenix, AZ - October 14th, 2011 --    The economic malaise in Europe and the U.S., along with the natural disasters around the world, have put a damper on 2011 semiconductor sales.  Heading into the holiday buying season, consumer confidence is low and inventories are higher than preferred.   OEMs are, at best, cautious and in most cases, pessimistic about their markets.  

Semico expected a shakeout in the tablet market and anticipated slower economic growth; however, conditions in the 3rd quarter prompted a downward adjustment to the forecast.  In addition to the decline in ASPs and semiconductor revenue, units and wafer demand have been cut as well.  Semiconductor revenues are now expected to decline by 1.4% in 2011, but units and wafer demand will eke out single digit growth rates.    

This year semiconductor units are expected to grow by 3.9% over 2010.  Although that is a positive growth rate, when compared to the 25% unit growth we experienced in 2010, anything below 10% feels anemic.  The growth is also impacting product segments differently.  While NAND chips will continue to experience over 20% growth, DRAM units will decline by 1.6% in 2011.  DSP is another major product category seeing a dip in unit sales, but sales in the wireless communication category continues to grow by over 20%.      

Wafer demand will continue to grow at 6.5% in 2011; however, that is 3.4% lower than our Q2 forecast.  In 2011, demand for wafers processed at 45nm or smaller will increase to 24.0% of total wafer demand compared to 16.7% in 2010.  Products processed on 45nm technology continues to be the sweet spot at the foundries.  Ramp of 32nm at GLOBALFOUNDRIES has been on schedule; however, TSMC reported their demand for 28nm is slower than expected. 

2011 Wafer Demand by Product by Technology

The Semico Wafer Demand Forecast is published quarterly and includes a breakout of wafer demand by semiconductor device by technology node for five years.  The Semico IPI is a monthly report that provides accurate, forward-looking predictions on the direction and strength of the semiconductor market twelve months in the future.  

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