VLSI ups IC, fab tool forecasts

SAN JOSE: VLSI Research Inc. has raised its chip and fab tool forecasts for 2010, despite the market going through a lull.

It has been observed that there has been a sudden slowdown in the cell-phone, LCD, LED, PC and other product segments. This is a trend that impacts chip makers, and at this point of time chip inventories are on the rise.

Despite this being the market scenario, VLSI raised its IC forecast to 33.7 percent in 2010, compared to 30 percent in the previous update. A statement from the company says that this is due to the monthly sales data for June and July being stronger-than-expected. The firm says that equipment sales are expected to grow 103 percent, compared to its previous estimate of 96 percent.

The fab tool market is in a multi-year cycle, with growth extending into 2011. The firm points out that the growth of 2010’s magnitude has historically been followed by a downturn. This year’s growth, however, is coming off a very low base. This ensures that even with a 103 percent increase, total equipment sales will still be 14 percent lower than the 2007 peak.

They anticipate that the next downturn for equipment suppliers will come in 2012, and based on the fact that three out of the last four cycles have run two-year’s up and two-year’s down, they forecast that the next downturn is likely to extend into 2013, which will be followed by another boom in 2014.