Expect slightly lower prices for standard logic

By Jim Carbone -- Purchasing, 5/14/2008 8:35:00 AM

Buyers can expect stable to slightly declining prices for standard logic through the rest of the year as the overall economic slowdown in the semiconductor industry limits growth in the standard logic market.

Global standard logic revenue will grow by about 4% in 2008 after growing about 3.5% in 2007. However, growth rates will rebound in 2009 and 2010 as the economy improves, according to researcher iSuppli. In 2008 the market will grow to about $2 billion, but then rise 8.5% in 2009 and 7.5% in 2010. By 2012, the standard logic market will reach $2.7 billion.

Prices for standard logic will fall slightly through the rest of the year. The average price for a standard logic chip was about 10.4¢ cents in the fourth quarter of 2007. It fell to 9.9¢ in the first quarter of this year and will drop to about 9.6¢ by the fourth quarter, according to iSuppli.

“Gone are the days when the price was 20¢. Now the price is up or down between 9.9¢ and 9.6¢,” says Roger Banks, market analyst for iSuppli.

The price drop might have been more severe, but suppliers say their raw materials costs are increasing.