El Segundo, CA – Worldwide semiconductor revenue will grow to $254.7 billion in 2006, up 7.4% from $237.1 billion in 2005, predicts iSuppli’s latest forcast. The previous forecast, issued in January, called for a 6.8% increase in global semiconductor revenue in 2006.
 
The major factor behind the revised outlook is the improving condition of the DRAM market, which will account for more than 10% of worldwide semiconductor revenue in 2006. Compared to 2005, when DRAM revenue contracted by 6.2%, sales in 2006 will rise by 6.2%, growing to $26.4 billion.
While revenue growth in the second-largest segment of the memory business, NAND flash, will decelerate in 2006, it will still generate a healthy increase, growing to $13.8 billion, up 29% from 2005.


With growth of 3.6% in 2005, and 7.4% in 2006, the semiconductor market is experiencing a “double bottom,” where during a period of two years growth is lagging the overall semiconductor CAGR of 8.2% from 2005 to 2010, according to Gary Grandbois, principal analyst for iSuppli.


“It had been debated for some time whether 2005 or 2006 would be the bottom year in the downside of the silicon cycle; in fact, it appears that both represent an extended period of moderate growth before the market returns to double-digit growth in 2007,” Grandbois said.