As shown in Figure 1, the worldwide semiconductor market first exceeded $200 billion in the boom year of 2000 and $100 billion six years earlier in 1994. IC Insights expects that the semiconductor market will reach $247 billion this year, a 9% increase over 2005. From 1990, when the market first exceeded $50 billion, through 2006, the worldwide semiconductor industry registered a CAGR of 10.4%. This historical 16-year CAGR is only slightly higher than IC Insights' 10.1% CAGR forecast for the 2006-2011 timeperiod.

To serve the fast-growing semiconductor market, semiconductor vendors must invest significant amounts of capital for new equipment (fabrication, assembly, test, etc.) and facilities. Figure 2 shows the milestone years for semiconductor industry capital spending beginning with 1989, the first year capital outlays exceeded $10 billion.

IC Insights expects that semiconductor industry capital spending will reach $53 billion in 2006, a 14% increase over 2005. The capital spending record ($60 billion), that still stands today, was set back in the boom year of 2000. As shown in Figure 2, IC Insights believes that semiconductor industry capital spending will exceed $80 billion in 2011. At this level, the capital spending as a percent of semiconductor sales ratio would be similar to the 2006 ratio of 21%.

Figure 2

The 2007 editions of IC Insights' McClean Report (A Complete Analysis and Forecast of the Integrated Circuit Industry) and O-S-D (Optoelectronics, Sensors, and Discretes) Report are scheduled for release in January 2007. Together, the reports provide a complete study of the worldwide semiconductor (ICs and O-S-D devices) market. Packed with numerous tables and graphs, these reports will be available in three-ring binder, CD-ROM, and on-line formats.