SAN JOSE, California
VLSI Research Inc. has increased its IC growth forecast for 2011.
For some time, VLSI said that the IC market would hit $268.7 billion in 2011, up 8.1 percent over 2010. In the new forecast, VLSI said that the IC market will now hit $270.7 billion in 2011, up 8.9 percent over 2010.
Last year, the IC market grew 30.9 percent, according to the firm. Right now, meanwhile, there are mixed signals in the IC market. ''Order activity turned lower for the first time this year,'' according to VLSI, in a a newsletter.
''It’s driven largely by the weakness in the memory market, according to the firm. ''DRAM orders have fallen to low levels and they’ve yet to bottom. NAND flash is doing well and it’s picked up some of the slack, though it has not been enough to offset the weakness in DRAM. The rebound of DRAM prices early in the year brought hopes that this market has turned the corner and that spending would pick up in the second half of the year. However, the recent slide of DRAM spot prices is troublesome, putting a big question mark for future spending plans.''
There is more bad new for DRAM. ''DRAM spot prices plunged for the second straight week despite rumors of supply disruptions. These rumors failed to drive prices higher because some DRAM manufacturers were releasing supply in the spot market. As a result, the earlier optimism among traders has turned into caution. NAND Flash fared better than DRAM. Still, slow demand is a nagging issue for NAND and it’s putting ASPs under pressure despite tight supply in the spot market,'' according to the firm.
NAND and other chips could get a boost, thanks to Apple Inc.'s iPad2 announcement, which is expected today. ''Regarding the iPad, our contacts see an improved iPad 2 production forecast for both 1Q11 and 2Q11. 1Q11 iPad production is now set at 5.5 million units, up from 5.1 million units previously, with iPad driving about 2 million units of that total (up from about 300,000 units previously),'' said Craig Berger, an analyst with FBR, in a report. ''For 2Q11, our contacts now see 7.2 million units of iPad production, with almost all of that production of iPad 2 devices, meaningfully ahead of the prior iPad 2 production ramp plans.''
But for the most part, there is a lull in the quarter. ''Regarding updated back-end assembly/test checks, we see stability in aggregate versus prior checks, with 1Q11 production set to seasonally fall about 6.5 percent quarter-over-quarter, with slight positive production revisions by Broadcom, AMD, and Xilinx not fully offsetting production declines by Mediatek and Marvell,'' he said.
''SanDisk believes that 20-25 percent of the notebook market will eventually be cannibalized by tablets,'' said Hans Mosesmann, an analyst with Raymond James & Associates Inc.
The outlook is bright for NAND. ''Smartphone NAND content is expected to move from 8GB to 20GB by 2014. In tablets the move is from 31 GB to 96 GB,'' he said.
''SSDs are expected to be a bigger factor as HDD (hard disk drive) replacement becomes less important relative to 'small form factor' NAND (MacBook Air like products). Look for SSDs to be highly price elastic, particularly in 2012 as units increase to ~30 million units (130 GB content) from less than 10 million units (90 GB content) seen in 2010,'' he said.
''Interestingly, SanDisk sees the 128 GB SSD price 'delta', vs. a typical HDD (1 TB size), to close into the $50 range from last year's ~$200 delta. Notebook OEMs at the $50 price delta will move aggressively to SSD solutions and hence SanDisk believes 2012 will see an inflection point for SSD adoption, a dynamic we believe is tough to argue against,'' he said.
Rising sales of tablet devices coming at the expense of conventional netbook PCs will contribute to a low single-digit decline in shipments of hard disk drives (HDDs) for the first quarter of this year, according to IHS iSuppli.
HDD shipments in the first quarter of 2011 are anticipated to reach 160.9 million units, down 3.9 percent from 167.5 million in the fourth quarter of 2010.
“Tablets like Apple Inc.’s iPad represent a major threat to HDD demand,” said Fang Zhang, analyst for storage systems at IHS, in a report. “Among the various computing segments in which HDDs are used, the netbook—with lower computing capabilities than either a desktop or laptop—is considered the most vulnerable to being supplanted by tablets, which do not use hard disks as storage media. And as tablet adoption gains momentum, netbooks will suffer even greater declines.”
There are other mixed signals in the market. Pricing for large-sized liquid-crystal display (LCD) panels ''are continuing to decline in February in light of soft demand and rising inventories, but the situation could improve by April when brands increase their TV panel purchasing,'' according to IHS iSuppli research.
Prices of large-sized LCD panels, defined as those ranging from 10 inches to 55 inches in the diagonal dimension, are projected to fall 1.2 percent on average across the product’s three main applications of televisions, monitors and notebooks.
Price declines in the 1 percent range have been the norm in the last four months, and panel prices as a whole have not risen since March 2010, as shown in the attached figure. In particular, pricing for TV panels fell throughout the period, while that of monitor and notebook panels rose slightly in October and November.
“The current price retreat can be traced to escalating inventory for both suppliers and buyers,” said Sweta Dash, senior director for liquid-crystal displays at IHS, in a report. “While average inventory among panel suppliers stands at a normal 29 days, some suppliers are seeing a decrease while others are witnessing a surge, so the situation in general is more ambiguous than what inventory levels suggest.”
On another front, shipments of CMOS image sensors for digital still cameras (DSCs) are set for rapid growth over the next three years, allowing them to exceed those of charge-coupled devices (CCD) for the first time ever in 2013, according to new IHS iSuppli research.
CMOS image sensor shipments for DSCs in 2013 will reach 71.1 million units, up from 30.7 million in 2010. Meanwhile, CCD shipments will decline to 66.9 million in 2013, down from 94.1 million in 2010.
By 2014, more than 85 million DSC CMOS units will be shipping, compared to 51 million for CCD. The attached figure presents the 2009-2014 unit shipment forecast for CMOS and CCD image sensors in DSCs.
“After many years of using CCD technology, original equipment manufacturers (OEM) like Sony, Canon, Kodak, Casio and Samsung now are turning to CMOS, which has narrowed the image quality gap with CCDs to a great degree,” said Pamela Tufegdzic, analyst for consumer electronics at IHS, in a report. “This has allowed DSC makers to enjoy the advantages provided by CMOS sensors, including lower power consumption and reduced cost.”
On another front, automakers are starting to capitalize on the demand for the same dynamic multimedia experience in the car that consumers have become accustomed to in the home; that is, to integrate in-vehicle infotainment (IVI) systems into a wider range of automobiles in order to reenergize new vehicle sales. As a result, new In-Stat research forecasts that over 35 million in-vehicle infotainment (IVI) systems are expected to ship in 2015.