Electronic equipment market growth set to slow

Electronic equipment market growth set to slow

LONDON ¡ª The party is over for exceptional growth in the global electronic equipment market iSuppli suggests, predicting expansion will slow this year.

Over the past three years the sector has enjoyed worldwide revenue growth of 11 percent, 8.0 percent and 7.7 percent in 2004, 2005 and 2006, respectively. The strongest increases have come from demand in PCs, mobile handsets and hot consumer-electronics products such as MP3 players and digital televisions.

According to Gary Grandbois, principal analyst at the market research group, growth will continue but only at a more modest 6 percent this year, due to cooling of the wireless, consumer and industrial marketseven as the PC market revives.

iSuppli (El Segundo, Calif.) predicts a slight improvement for next year to 6.4 percent, but then experience a steeper decline in 2009 to growth of just 4.8 percent.

The market research group says the second quarter of 2007 was something of a surprise for the PC market, with much stronger growth than typically seen at that time of the year.

Mobile handset growth remains vibrant in 2007 and is expected to end the year with a 10 percent unit increase. However, revenue growth will be only 5 percent as Average Selling Prices (ASPs) continue to decline.

Semiconductor revenue for wireless communications is said to have grown by grew by 14.2 percent in 2006, driven by the 20.7 percent unit growth of handsets. The 2007 semiconductor revenue growth for wireless communications will be 7.7 percent as the handset unit increase slows to 10 percent, one of the many factors behind the present slowing in the semiconductor market. iSuppli also suggests the frenzied demand for new consumer-electronics products over the past four years is also cooling; revenue growth for the consumer-electronics market dropped by about one-third in 2006, to 9 percent. And it is expected that growth will decline by more than one third in 2007, to a smaller, but respectable 5.2 percent revenue growth as the market slows and ASPs continue to plummet.

The wired communications segment is expected to post 3.1 percent growth in 2007 and automotive electronics are expected to post a 3.9 percent increase in 2007, a weaker trend than seen in recent years.

The industrial market rebounded to 8 percent revenue growth in 2006 as the military/aerospace, medical and semiconductor manufacturing equipment markets grew strongly. But industrial market growth has flattened in 2007, especially in the semiconductor manufacturing equipment sector.