Quake makes analyst raise IC market forecast
However, this is bad news for chip buyers implying that they will be paying more money for fewer chips than in previous years as average selling prices (ASPs) go up.
IHS-iSuppli argues that shortages of components will result in higher prices that will more than make up for the shortfall of ICs thereby raising the value of the market. The company warns that if problems of raw wafer supply persist that could impact DRAM suppliers in particular in October causing DRAM prices to go up yet further.
The latest forecast is that semiconductor revenue will grow by 7.0 percent, up from a 5.8 percent figure previously put out by IHS-iSuppli. The company now sees 2011 quarterly revenues at $76.06 billion, $78.03 billion, $84.51 billion and $86.62 billion, sequentially.
The forecast increases the 2011 DRAM revenue forecast by 6.6 percentage points, and now anticipates this area will experience only a 4 percent decline. The increase in revenue in this area is entirely driven by an increase in average selling prices during the first quarter, partly because of supply disruptions caused by the earthquake.
"The earthquake will result in a 1.1 percent 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 percent. 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."
Neither of Japan’s DRAM fabs was damaged in the quake. However, a chip assembly plant in Akita owned by Elpida Memory Inc. suffered a disruption in production, causing the reduction in shipments.
Average contract DRAM prices in April are forecasted range from unchanged to a 2 percent increase, compared to a previously expected 3 to 4 percent decline.
Upward price pressure is expected to ease for DRAM in the second half of the year unless raw wafer supply problems persist or worsen.
"Supply of 300-mm raw wafers could be a problem for memory makers," said Howard. Because of the inventory of wafers that fabs hold and the length of time chips spend as work in progress, shortages need not manifest themselves until October, but could then result in further price increases for DRAM, Howard said.
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