Analyst: Short IC Supply Means Higher Revenue
EL SEGUNDO, CA -- Supply disruptions brought on by natural disasters in Japan will spur higher semiconductor pricing, particularly for memory, in 2011, a leading analyst said today.
IHS iSuppli raised its semiconductor forecast for the year, citing shortages from the March 11 earthquake and subsequent tsunami. Memory in particular will be dramatically affected, iSuppli said.
The research firm now forecasts semiconductor revenue to grow 7% to $325.2 billion in 2011, up from its previous 5.8% forecast made in early February.
iSuppli upped its DRAM sales forecast 6.6 percentage points, to a 4% decline for the year. The firm said the difference is "entirely driven" by higher average selling prices during the first quarter.
The earthquake changed the typical seasonality felt by the memory market, which traditionally has softened toward the end of the first quarter. “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. “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.”
iSuppli said the forecast for average April contract DRAM prices ranges from unchanged to a 2% increase, compared to a previously expected 3 to 4% decline. The effects will primarily be felt through the June quarter, iSuppli said. However, wafer supply constraints brought on by damaged fabs could mean a longer period of price inflation.
Overall semiconductor revenue will exceed previous expectations during each quarter of 2011, iSuppli added.
