Outlook is good for semiconductor revenue

Some of the news is good and some is bad, but the overall outlook for semiconductor revenue growth over the next four years is rosy, according to a new report by IDC. The bad news is that the growth in the desktop PC and enterprise HDD markets will be flat. The good news, though, is that fast growth in the mobile PC HDD segment and especially the small form factor HDD chip segment will more than make up for that flatness.

Mobile PC growth is expected to enjoy a compounded annual growth rate of 9.6% from 2004 to 2009. Small form factor HDDs will grow by 39.4% annually over the same period. The small form factor segment will make up nearly a quarter of the revenue in the market by 2009.

Shane Rau of IDC delivers a warning along with the results. “It is critical for HDD semiconductor suppliers to become mindful of end demand as volatile consumer markets grow to drive more and more HDD unit shipments. Consumer markets are also perilous for the growing conflict they represent between HDD storage and NAND flash memory storage.”

Another interesting conclusion of the report is that the widespread adoption of NAND flash will force small form factor drives to move into devices that need more memory than NAND can economically support. HDD manufacturers, then, will be hoping against developments in NAND flash technology in order to maintain their market.


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