TH ZVEI professional association electronics Components and of system raised its growth prognosis somewhat.

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So the German market for electronic elements is to grow in the current year now by 5 per cent. 10. May 2006 12:02 (ZVEI) of: Herbert Hoenle In the next year the speed is to again add, whereby however the Rohstoffpreise could provide for unpleasant surprises. So far the professional association had proceeded from a growth from 4,5 per cent to 18.3 billion euro. For the year 2007 professional association chairman Peter Bauer counts on a further plus of more than 6 per cent. The demand for semiconductors is to add superproportionally. The ZVEI experts count in the current year within the range of the semiconductors on 6 per cent higher conversions, after the year 2005 could exhibit only a moderate growth of scarcely 3 per cent (on 11.6 billion euro). The growth of the data processing technology, the industrial electronics and Kfz electronics is driven. For the coming year with far rising market of the semiconductor components one goes out. Thus an increase in sales is expected by scarcely 9 per cent on 13.4 billion euro.

Budapest, Hungary — Semiconductor market analysts are still under estimating how good a yeart 2006 could turn out to be according to Malcolm Penn, chairman and CEO of Future Horizons. Speaking at his company’s Annual International Electronics Forum, Penn was still confident that his forecast made in January of a growth in dollar sales of semiconductors topping 20% this year was realistic while unit sales would grow 12%. Other major analyst predictions are coming out showing an average growth of 8% with only one willing at present to break the 10% barrier.
Penn is bullish that a combination of an improvement of 4.9% in world GDP which the IMF upgraded from 4.3% last week, a rise in unit demand and a shortage of capacity, pushing prices up, will provide the catalyst for a good year. "All the evidence is strong and everything is in place - if it is not a strong year then the semiconductor industry does not deserve a strong year," says Penn.
No-one believes that the chip industry can bounce back says Penn and there is too much of the 'Ill see believe it when I see' attitude but by the time it becomes evident it will be too late too take advantage.
Penn say the recovery in the unit demand started last May while a recovery in the average selling price started in the third quarter of 2005. Last year is seen as a market correction not a recession with the second half coming on strong after a first half depressed by inventory purges. "Markets normally bounce back fast from a correction," according to Penn. While average selling prices (ASPs) have bottomed out, they take a time to recover, anything between 4 to 8 quarters after unit demand has improved