IC outlook for 2010: Revenue to grow 18.8 percent in 2010

NEVADA CITY, USA: IC revenue will grow at 18.8 percent in 2010, with unit growth at 18 percent, according to New Venture Research (formerly Electronic Trend Publications). This is considerably better than the 8.8 percent decline in revenue and 6.9 percent decline in units in 2009.

According to Sandra Winkler, Senior Industry Analyst at NVR, DRAMs are anticipated to be the largest growth area for ICs, with 40 percent revenue growth in 2010. Numerous analog chips, including regulators & references, computer, communications, automotive, and industrial applications; special purpose logic chips including consumer, computer, communications, and automotive; flash, EEPROM, 32-bit MCU, and standard cell and PLD chips will all see revenue growth rates in excess of 15 percent.

Low interest rates, low oil prices, and the stimulus packages that were instituted around the world are all contributing to a stabilizing economy and upturn. Purchases were less than the replacement market in 2009, and pent up demand is pulling the market in a positive direction.

Cell phones, particularly the high-end smart phones, will see high growth rates. Smart phones are gaining in popularity and are becoming a larger piece of the cell phone pie. Anything handheld and somewhat affordable that keeps us connected to the rest of the world seems to be doing well. New product introductions such as Apple’s iPhone is becoming a hot topic, the iPad is expected to do well, and the Blackberry by Research in Motion (RIM) has been doing well for some time.

Netbook computers, with prices as low as $200 during holiday sales, and notebook computers are driving up IC demand. Other high growth areas include 3D and digital TVs, DSL/cable modems, flash drives, memory cards, set top boxes, digital cameras, automotive, and an assortment of audio applications.

The economy is stabilizing, which is easing fears of spending on consumer goods. The housing market, which took down the economy by taking the credit markets down with it, is stabilizing, and the ratio of income to housing expenditure is more balanced than it was previously.

The automotive market, which is host for numerous ICs, had fallen substantially during the downturn. This market did benefit from the cash-for-clunkers program, although automotive sales fell back after the program ended. But it became a booster to spending, which helped. And automotive is expected to turn up in 2010 and beyond, particularly in areas such as China.

Overall, spending is higher now than it was in the depths of 2009. And that is what is pulling up and out of the sloth of 2009, and will carry us to a more positive future.