IHS iSuppli claims the Japan earthquake and tsunami will actually boost semiconductor revenue globally in 2011, as prices rise due to parts shortage.
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IHS iSuppli claims the Japan earthquake and tsunami will actually boost semiconductor revenue globally in 2011, as prices rise due to parts shortage.
In a previous prediction, IHS iSuppli had claimed a 5.8 percent expansion for the semiconductor industry in 2011, but the latest forecast has this up to 7.0 percent.
Global semiconductor revenue in 2011 now is expected to amount to $325.2 billion, compared the previous forecast of $320.1 billion.
This growth is due to a boost in the revenue outlook for dynamic random access memory (DRAM) devices. The new IHS iSuppli forecast increases the 2011 DRAM revenue forecast by 6.6 percentage points, and now anticipates this area will experience only a 4 percent decline for the year, compared to an expected decrease of 10.6 percent growth previously.
This increase in revenue is entirely driven by an increase in average selling prices during the first quarter, partly because of supply disruptions caused by the earthquake.
According to IHS iSuppli, the earthquake resulted in 1.1 percent reduction in global DRAM shipments in March and April, causing DRAM prices to stabilise in March, which is typically a weak month in sales.
Neither of Japan’s DRAM fabs was damaged in the quake. However, a chip assembly plant in Akita owned by Elpida Memory Inc. suffered a disruption in production, causing the reduction in shipments.
Upward price pressure is expected to ease for DRAM in the second half of the year.
However, DRAM pricing could face further increases later this year if wafer shortage issues worsen.
Japan is the world’s leading producer of silicon wafers, the key raw material used to make semiconductors, accounting for 60 percent of global supply.
Top wafer supplier Shin-Etsu continues to suffer production outages for its 300mm wafer manufacturing. The company’s Kamisu and Nishigo plants are down, which together account for about 20 percent of global wafer production.
Depletion of the raw wafer inventory could adversely impact on the manufacturing efficiency for DRAM. This could lead to further price increases.