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According to iSuppli Corp., revenue from global shipments of core ICs—applicationspecific standard products (ASSPs), applicationspecific ICs (ASICs), and programmable logic devices (PLDs)—will see a weak finish to 2008 and decline in 2009. While global core silicon saw $101.3 billion in revenue in 2008, which is a modest 1.8% rise from 2007’s $99.5 billion total, it will decline by 9.9% in 2009 to drop to $91.2 billion.

ASIC shipments depend on a handful of systems. Video games, iSuppli says, consume almost 30% of all logic ASICs—or somewhat less when analog and DSP ASICs are aggregated. Falling console shipments and the consumer shift from high-priced Microsoft Xbox 360s and Sony PlayStation3s to less expensive Nintendo Wiis will cause the ASIC market to drop by several percentage points compared to previous forecasts.

Similarly, hard-disk drives (HDDs) account for more than 18% of all ASIC use. According to iSuppli’s preliminary forecasts, unit shipments of rigid disk drives will fall by 11 million units in 2009, compared to 2008. As HDD street prices fall to a level where storage is virtually unlimited and essentially free, ASIC prices will fall, compounding the falling unit volumes.

Considering these declines, iSuppli now expects 2009 ASIC revenue to fall slightly, representing a second consecutive year of decline. The company currently expects shrinkage of approximately 8.5%. “Such application-specific semiconductors, whose sales grow in concert with high-volume applications, shrink with those applications when the tide turns,” said Jordan Selburn, principal analyst, semiconductor design, for iSuppli.

Databeans, another market research firm, says the combined PLD and standard-cell ASIC market will shift as PLDs and field-programmable gate arrays (FPGAs) migrate into major consuming application segments. For 2008, the company estimates a market of $11.7 billion on 1.3 billion PLD and standard-cell ASIC units shipped. Over the next five years, Databeans expects unit growth to outpace revenue growth slightly, due to increased efficiencies and lower manufacturing costs.

Richard Gawel