March 30, 2011

VLSI Research Inc. has increased its IC forecast amid stronger-than-expected demand in the first quarter.

IC sales for 2011 are now expected to increase 12.2 percent, compared to the previous forecast of 8.9 percent. ''The first quarter came in so hot,'' said G. Dan Hutcheson, CEO of VLSI Research. In Q1, IC sales were up 11.6 percent, compared to a historical rate of minus 1.8 percent for the period, according to the firm.  

IC unit growth was also bumped up from 11 percent to 14 percent. ''The primary reason for raising the IC forecast is that Q1 has set a high base for the year,'' according to the firm.

''Even with a significant pullback in coming quarters, as forecast, there will be double digit growth in 2011,'' according to the firm. ''This breakneck pace is unsustainable, given that electronics sales are growing at a much lower rate.  Rising oil prices, inflation, and the Japanese crisis will also dampen growth. Therefore, we expect the momentum to subside considerably in the next three quarters, with quarterly growth being well below the seasonal trend.''