SAN FRANCISCO—The IC market embarked on the road to recovery in the second quarter, growing 16 percent compared to the first quarter, according to a market research firm.

IC Insights (Scottsdale, Ariz.) said the 16 percent sequential growth rate is the fourth-highest quarter-to-quarter growth rate in the past 25 years. The IC market contracted by 26 percent from the third to fourth quarters of last year and by another 14 percent in the first quarter of this year, according to the firm.

The total size of the IC market in the second quarter was roughly $45.4 billion, according to IC Insights, down about 21 percent from $57.3 billion for the same period of 2008.

"There really are some extremely positive developments going on in the IC market that I believe are not getting the attention they deserve," said Bill McClean, president of IC Insights, in an email exchange with EE Times.

May and June DRAM and microprocessors shipments were flat with May and June of 2008, McClean said. NAND flash unit shipments over that period were up 15 percent year-to-year, he said.

"Consider this relatively strong unit shipment growth data in the context of it occurring in the worst global downturn in 60 years," McClean said.

Capital expenditures by memory makers are set to decline 60 percent in 2009, McClean said. Combined with strong unit volume demand this should set the stage in 2010 for price and market increases, he said.

Compared to the first quarter, the DRAM market grew more than 30 percent, analog IC and DSP unit volume shipments increased more than 30 percent and more than 40 percent, respectively, IC Insights said.

In a research bulletin dated Friday (July 10) IC Insights said that an inventory replenishment surge in the second quarter is expected to take away some of the momentum from the third quarter.

IC Insights is predicting much improvement in the semiconductor industry in the second half. The firm's mid-year forecast update predicts 18 percent IC growth compared to the first half of the year.