VLSI ups IC forecast, sees super cycle

VLSI has increased its 2010 IC sales forecast to 25 percent from 22 percent. IC units were also upgraded from 19 percent to 24 percent, according to the firm.

''The main reason was results for 1Q '10, which came in higher than predicted. In fact, the stronger-than-expected 1Q '10 results have put our IC models to a tipping point: they are now projecting a super cycle for ICs, with growth rates hitting a high range that reaches to 40 percent,'' according to a new report from the firm.

Many forecasting firms have upped their IC forecasts to 30 percent or more. ''However, we’ve been cautious about the IC super cycle scenario given what’s happening at the macroeconomic level. Even though the European credit crisis isn’t likely to throw the global economy back into a recession, it could slow the recovery,'' according to VLSI.

''April was also as soft as May. Consequently, we expect the momentum to decelerate in the second half of the year, which is why we are keeping the IC forecast on the low-side,'' according to the firm.

IC inventories remain healthy despite recent concerns. ''An inventory build up has been one of our biggest concerns in the last few months, mainly because IC sales have been growing at a much faster clip than electronics sales. However, that does not appear to be the case,'' the firm added.