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August 22, 2007

2007 Microcomponent Forecast: Microprocessors Recover;

MCUs Hit Record Sales; DSPs Struggle

IC Insights’ Mid-Year Update underscores dichotomy within microcomponent segment

The microcomponents segment of the IC industry has become a mixed bag of market conditions for microprocessors, microcontrollers, and digital signal processors in 2007. New analysis in IC Insights’ Mid-Year Update to The McClean Report 2007 breaks down the $56 billion microcomponents market segment (Figure 1) this way:

  • Microprocessors will see a modest recovery in 2007 after pricing competition eroded MPU revenues in 2006 and the first half of this year. Thanks to solid demand for personal computers in 2007, microprocessor sales are now expected to increase 4% to $34.5 billion compared to $33.2 billion in 2006, when MPU dollar volume fell 5% (Figure 2). In 2008, microprocessor sales are forecast to grow 17% to $40.3 billion during the industry’s next cyclical peak growth year, according to IC Insights’ Mid-Year Update.

  • Microcontrollers will achieve new record-high sales in 2007 with MCU unit volume shipments surging 21% this year. Worldwide microcontroller revenues are forecast to reach the $14.0 billion mark in 2007, a 13% increase from $12.4 billion in 2006. In 2008, MCU sales are expected to rise another 13% to nearly $15.8 billion, based on IC Insights’ mid-year forecast.

  • Digital signal processors remain bogged down in another difficult year. DSP sales are expected to decline 5% in 2007 due to inventory corrections in cell-phone equipment markets. In 2006, DSP sales rebounded with a 9% increase after dropping 2% in 2005. DSP dollar volume is now expected to total $7.9 billion in 2007 compared to $8.3 billion in 2006. DSP unit volume remains relatively weak in 2007, with device shipments expected to grow 9% this year compared to an average annual growth rate of 18% between 2001 and 2006. In 2008, the DSP market is forecast to recover and display a 13% increase to $8.9 billion, according to IC Insights’ new report.

The microcomponents market accounts for about one quarter of worldwide IC sales. IC Insights’ forecast shows total sales in the microcomponents segment growing at a cumulative average growth rate (CAGR) of 9% per year between 2006 and 2011. Combined MPU/MCU/DSP sales are expected to reach $84.5 billion in 2011 compared to $56.4 billion in 2007.

Figure 1

Figure 2

Report Details

IC Insights’ 2007 Mid-Year Update is provided free of charge to subscribers of The McClean Report, a comprehensive annual forecast for the IC industry. In a special offer, IC Insights is now making available stand-alone copies of the 2007 Mid-Year Update at a price of $1,490 for the initial copy and $395 for additional copies. IC Insights’ 190-page Mid-Year Update contains analysis of all major integrated circuit market segments and global economic trends as well as updated projections on semiconductor capital spending and forecasts on IC product revenues, unit volumes, and ASPs through 2011.

The McClean Report—the complete annual forecast package with monthly updates and the Mid-Year Update—is priced at $2,590 for a single copy in CD-ROM or three-ring binder format. A bundled CD-binder set is priced at $3,085. An Internet access password is available as a $695 option. The report is also available under a multi-user corporate license for $5,890.

For more information, please visit www.icinsights.com/prodsrvs/mcclean/.

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About IC Insights

IC Insights, Inc., based in Scottsdale, Arizona, is dedicated to providing high-quality, cost-effective market research for the semiconductor industry. Founded in 1997, IC Insights offers coverage of global economic trends, semiconductor market forecasts, capital spending and fab capacity trends, product market details, and technology trends, as well as complete IC company profiles and evaluations of end-use applications driving demand for ICs.

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