EL SEGUNDO, CA — The good news for the semiconductor industry is that 2007 will represent the peak year of its present growth cycle, with double-digit growth expected. The bad news for the semiconductor industry in 2007 is that due to the changing dynamics of the business, growth will amount to only 10.6%  for the year—far below historical market peaks.

So says research firm iSuppli. The firm calls for worldwide semiconductor revenue to grow to $285.8 billion in 2007, a 10.6% rise from $258.5 billion in 2006. This compares with its newly revised forecast of 9% semiconductor growth in 2006. After 2007, growth will decelerate to 8.7% in 2008 and then bottom out at 3.7% in 2009, before bouncing back to a 7.4% rise in 2010.

While some industries would kill to achieve 10.6% growth, iSuppli said, it represents a moderate rise for a semiconductor business that has seen expansions as high as the 30 to 40% range during its best years. However, the mild peak comes with a benefit: global semiconductor revenue is not expected to suffer a contraction during the present cycle. This should come as welcome news to semiconductor companies that still have the 28.9% revenue plunge of 2001 fresh in their minds.

“The milder cyclical swing reflects changed dynamics in the semiconductor industry,” said Gary Grandbois, principal analyst with iSuppli.