Chip Forecast Rises Through 2017

SAN JOSE, Calif. — Another market watcher is raising its forecast for growth in semiconductors this year and into 2017. International Business Strategies (IBS) predicts a 0.2% increase in chip sales this year and a 4.6% rise next year.

At an industry event in January, Handel Jones, chief executive of IBS, was the bear, predicting a 1.5% decline while Bill McClean of IC Insights was the bull, forecasting four percent revenue growth in 2016. Now both are roughly in agreement.

Last month, McClean updated his projections to 1% growth this year and 4% in 2017. The two analysts point to similar dynamics of rising memory prices and increasing memory content in smartphones from growing suppliers in China.

Rising memory sales and prices are boosting chip forecasts. (Image: IBS)

Rising memory sales and prices are boosting chip forecasts. (Image: IBS)

In his latest update, Jones said DRAM prices should rise 20-30% in the second half of this year, making up for most of the declines that started about a year ago. NAND flash prices are also increasing “with bit growth of 36.2% in 2016,” driving the overall NAND market up 6.2% this year, the IBS statement said.

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