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EL SEGUNDO, CA – Global semiconductor revenue will rise to $281.4 billion in 2007, up 8.1% from $260.2 billion in 2006, according to iSuppli. Earlier, iSuppli predicted 10.6% growth for the year.

The growth rate of the global semiconductor industry is slowing because of weaker mobile phone growth, excess chip inventories and lower DRAM prices, says the research firm. The decline in outlook is a result of less demand and lower prices for memory chips.

Excess semiconductor inventories in the global electronics supply chain remained at $2.8 billion at the end of the first quarter.

Growth in the mobile-phone segment will slow dramatically in 2007 compared to 2006, which will impact chip sales, continues iSuppli. Revenue in the wireless communications equipment sector will rise to $202.3 billion in 2007, up 4.3% from $193.9 billion in 2006. This compares to 8.2% growth in 2006.

The biggest factor behind iSuppli's forecast revision is a reduction in expected DRAM revenue. The DRAM market hit a peak in 2006, with revenue rising by 35.2% to $33.9 billion. This strong increase will be followed by a major slowdown in growth, with revenue rising only 8.6% to reach $36.9 billion in 2007, predicts iSuppli. The company’s previous prediction was 13% growth in DRAM revenue this year.

The primary cause of the reduction is a plunge in DRAM average selling prices as available supplies increase. Memory suppliers are shifting capacity to DRAM and away from less-profitable NAND-type flash in 2007.

iSuppli also marginally reduced its outlook for global electronic equipment revenue in 2007. Global electronic equipment shipment revenue will rise to $1.49 trillion in 2007, up 6.3% from $1.4 trillion in 2006. This compares to iSuppli's previous forecast of 6.8% growth.

SCOTTSDALE, AZ – Asia will dominate the EMS/ODM markets for the next several years, reports In-Stat. China, with low-cost advantage and high demand, will account for nearly 76% of the Asian EMS/ODM market in 2011, the high-tech market research firm adds.

In-Stat says the Asia contract electronics manufacturing market will grow to $281.8 billion in 2011, from $121.5 billion in 2006. Asia will capture 55.1% of the global EMS market in 2011, up from 45% in 2006.

Consumer electronics will experience the fastest growth rates, followed by the communications segment.

For more information, please visit:

http://www.instat.com/catalog/apcatalogue.asp?id=239

WASHINGTON, DC – China is now the third largest destination for U.S. high-tech exports, says the AeA. In its just-released 15th edition of the Competitiveness Series, the AeA analyzes the growing economic relation between the U.S. and China in terms of high-tech trade and foreign direct investment.

Between 2000 and 2006, U.S. high-tech exports to China more than tripled to $14.1 billion, from $4.6 billion. Only the U.S.’s two NAFTA partners, Canada and Mexico, are larger export destinations for American tech products. On the other side, U.S. tech imports from China nearly quadrupled, to $102 billion from $26 billion between 2000 and 2006.

Total U.S. direct investment in China was $16.9 billion in 2005, a 12% increase over 2004. Chinese investment in the U.S. is small but rising, up 11% from 2004 to 2005, says AeA.

AUSTIN, TX – Newisys Inc., developer of multiple server technologies, is closing its manufacturing operation in Austin, TX and laying off 87 local employees.

Part of Sanmina SCI Corp., the San Jose-based parent company notified the Texas Workforce Commission of the layoffs in a letter dated May 8.

Newisys was founded in 2000 to capitalize on the Opteron chip produced by Advanced Micro Devices Inc. and was picked up by Sanmina SCI in 2003. It employed 100 people at that time.

Executives at Sanmina SCI could not be reached for comment.

LOS ANGELES – Northrop Grumman Corp. plans to close its Interconnect Technologies business in Missouri, and will discontinue PCB manufacturing for third parties, effective July 31.

Its interconnect business base is declining, and the plant is currently operating at about 25% capacity, the company said in a statement.

The factory produced backplanes and printed circuit boards.

PHOENIX – EMS provider Suntron Corporation reported net sales of $65.2 million and an operating loss of $1.2 million for the first quarter of 2007.

Gross profit for the first quarter was $3.5 million (5.3% of net sales), a decrease of $4.5 million compared to $8 million (8.4% of net sales) year-over-year.

Net sales in the first quarter last year were $95.8 million. This reflected a one-time increase in sales from an industrial customer and strong demand from semiconductor equipment customers.

PALO ALTO, CA – HP announced net revenue of $25.5 billion for its second fiscal quarter ended Apr. 30, representing 13% growth year-over-year.

For the quarter, year-over-year, revenue in the Americas grew 11% to $10.7 billion; revenue in Europe, the Middle East and Africa grew 14% to $10.3 billion, and revenue in Asia Pacific grew 16% to $4.5 billion.

OTTAWA – Under a recent license agreement, Ottawa-based PELA Technologies Inc. will supply DEK VectorGuard stencils throughout Canada. Financial and other terms were not disclosed.

EL SEGUNDO – Communications infrastructure equipment OEMs are engaging in a spate of mergers and acquisitions to become one-stop shops that can sell everything needed for telcos to compete in IPTV, according to iSuppli Corp.

At stake is a market for IPTV equipment that is expected to grow to $22.1 billion in 2011, up from $9 billion in 2007, the company says.

Leading the OEM M&A frenzy is Ericsson – with its purchase of Marconi in 2005, Redback Networks Inc. and Entrisphere Inc. in 2006, and its current pursuit of Tandberg TV. The company is positioning itself to be a complete IPTV supplier, iSuppli says.

Also, Motorola Inc. has purchased Netopia Inc., Tut Systems Inc. and Vertasent LCC—a developer of Video-on-Demand and IPTV software—and has forged a strategic alliance with ECI Telecom Ltd. Cisco Systems Inc. has followed the same path with its purchase of Scientific- Atlanta, Linksys and Arroyo Video Solutions, a maker of video-networking software, continues the research firm.

Meanwhile, Nortel Networks Ltd. entered into an agreement to jointly develop middleware for the IPTV market with pay-TV software specialist NDS Ltd. During the same period, the merger that resulted in Alcatel-Lucent is a leader in the IPTV equipment space. Finally, Siemens and Nokia merged, creating another potentially powerful competitor, according to iSuppli.

iSuppli expects the M&A activity to sustain its fast pace in 2007. The focus of M&A activity in 2007 will be on middleware, VOD and possibly video encoding, the company predicts.

CHICAGO – Premier Farnell, distributor of electronic components, has launched an international design competition called Live Edge: Electronic Design for the Global Environment. Newark, a Premier Farnell business, will support the competition throughout the Americas.

Electronics engineers, students and academics are invited to submit designs that utilize electronic components and have a positive impact on the environment by increasing energy efficiency or reducing carbon emissions, for example.

The closing date for registration is Oct. 31; entries must be submitted by Nov. 30.

The winning entrant will receive a cash prize of $50,000 and a support package, estimated to be worth an additional $50,000, to help produce the design. The winner will be announced in Jan. 2008.

Full details are available at www.live-edge.com/info.

Up to five entrants will be eligible for honorable mentions, each receiving a cash prize of $5,000.

Industry judges will be announced soon. Live Edge will be largely Web-based to readily accommodate entrants on an international level.

ST. PETERSBURG, FL – Jabil Circuit Inc. has announced profits of $164.5 million based on revenue of $10.3 billion through their fiscal end of August 2006.

Despite a $28 million reduction in profits from Jabil's restatement of earnings in 2005, overall profit remained lower in 2006. Jabil earned $203.9 million, based on revenue of $7.5 billion in 2005, according to SEC restated numbers.

NEW YORK – Credit Suisse analyst William Stein gave the EMS industry an “underweight” rating while initiating coverage of the sector. This rating means the industry is expected to perform worse than the broad market standard during the next year.

Called a “tough industry,” EMS companies have been impacted by congestion in expensive regions, particularly in the U.S. and Western Europe leading up to 2000, said Stein. He continued, “EMS companies … generate positive cash flow, and have enough liquidity to weather any reasonable industry downturn," even though they have some fundamental problems.

"Industry-wide utilization rates of approximately 60% in high-cost regions drive hyper competition, affording these companies no pricing power over their OEM customers," Stein explained.

When Credit Suisse started coverage of EMS providers, Flextronics International Ltd. received an "outperform" rating, while Stein rated Jabil, Sanmina-SCI, Benchmark Electronics, Inc., and Plexus Corp. "neutral." Solectron Corp. and Celestica Inc. were rated "underperform" by the analyst.