Chip Industry for 2006: Moderate Growth

Intel’s mid-quarter update confirmed what many industry experts were thinking: the waters for near term growth look fairly calm and sailing ought to be moderate but steady (not the most nautical of expressions but you know what we mean — help us out Larry Ellison). While investors didn’t like hearing this, the semiconductor industry looks poised for a year of somewhere between 6.9 percent to 8 percent growth according to the two major research firms Gartner and IDC.

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SAN FRANCISCO December 9, 2005 (PodTech News) – Intel’s mid-quarter update of its performance was not as positive as traders had hoped. Still, the world’s biggest chipmaker narrowed its forecast around the midpoint of the target it previously set.

Traders had hoped Intel’s midpoint of its projected sales range would be readjusted above the 10.5 billion dollars the company previously indicated. In October, Intel projected a revenue range of $10.2 billion to $10.8 billion. On Thursday, the world’s biggest chipmaker narrowed that to a range of $10.4 to $10.6 billion.

That threw a little water on the notion that the chip industry was set for some faster growth. The Nasdaq lost a point into afternoon trading.

Intel’s steadiness dovetails with semiconductor market researchers who see moderate growth ahead. “We’ve been making incremental changes to our forecast for the chip market over the course of this year based on additional demand,? IDC’s Shane Rau told PodTech News. “But our number for 2006 has been pretty stable throughput the year.? IDC expects chip revenue next year to hit $225 billion, an 8 percent increase over 2005.

Gartner, which uses slightly different methods of analysis, expects a 6.9 percent increase to $235 billion.

Author: John

Entrepreneur living in Palo Alto California and the Founder of SiliconANGLE Media

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