The latest IHS iSuppli semiconductor forecast for 2011, issued on March 30, calls for annual semiconductor revenue growth of 7%, up from the 5.8% expansion predicted in the previous outlook from early February. Global semiconductor revenues in 2011 now is expected to amount to US$325.2 billion, compared the previous forecast of US$320.1 billion.
Supply disruptions related to the Japan earthquake and tsunami will contribute to higher than previously expected global semiconductor revenues in 2011, as shortages bolster pricing for key memory devices, IHS indicated.
The biggest factor contributing to the increased semiconductor forecast is a boost in the revenue outlook for DRAM devices, IHS said. DRAM revenues will experience only a 4% decline for 2011, compared to a decrease of 10.6% estimated previously. The increase in revenues in this area is entirely driven by an increase in ASPs during the first quarter, partly because of supply disruptions caused by the earthquake.
"The earthquake will result in a 1.1% reduction in global DRAM shipments in March and April," said Mike Howard, principal analyst for DRAM and memory at IHS. "This reduction, along with other factors, contributed to a steadying in contract prices for DRAM in March, which typically is a weak month for sales when prices were expected to decline by as much as 3%. The impact of the prices holding steady during this period is dramatic - and will represent a major boost for DRAM revenue for the entire year."
Average contract DRAM prices in April are forecast to range from unchanged to a 2% increase, compared to a previously expected 3-4% decline, IHS said.
DRAM pricing could face further increases later this year if wafer shortage issues worsen, IHS pointed out. Japan is the world's leading producer of silicon wafers, accounting for 60% of global supply.
"Supply of 300mm raw wafers could be a problem for memory makers," Howard noted. "If these supply problems persist, manufacturing efficiency will be impacted when raw wafer inventory is depleted. When the number of wafers in the manufacturing supply chain declines to less than 50% of typical levels, then DRAM output will be impacted. This could happen starting in October, resulting in further price increases for DRAM."