The CAGR of the semiconductor market for 2011-16 will be double that of the preceding five years, says IC Insights.

Memory will drive the accelerated growth rate. NAND flash is forecast to grow at a CAGR of 16.6% until 2016 and DRAM is expected to grow 9.6% CAGR till 2016.

The NAND and DRAM growth rates are enough by themselves to double the CAGR for 2011-16 compared to the CAGR for 2006-11.

Other key markets like microprocessors and analogue are forecast to enjoy a modest increase in average annual market growth through 2016.

Market growth for optoelectronics, sensors, and discrete (O-S-D) devices is forecast to out-perform the IC market by averaging 10.6% annual growth compared to 7.4% for ICs.

Tablet computers, smartphones, and the wide array of other portable wireless devices will keep semiconductor units growing at a steady pace through 2016, but strengthening ASPs will be the main driver behind improving market conditions.

With many semiconductor companies closing their doors and others that are merging or being acquired (e.g., Micron's pending acquisition of Elpida), fewer players have the capital resources required to build new 300mm wafer fabs.

Consequently, the chance of an overcapacity situation throughout the industry (and the associated steep price declines it often creates) will be reduced. The outcome is expected to be steadily upward-trending average selling prices through 2016, compared to the 3% annual decline that ASPs averaged between 2006 and 2011.

Since Moore's Law mandates a halving of cost every 18 months, a rising price means high profitability for the semiconductor companies.

For this year, the most optimistic forecaster is Semico with a 6-8% growth forecast.

IDC is forecasting 4.6%; IHS expects 4.3%; while Gartner and Future Horizons plump for 4% and IC Insights goes for 3%.