PHOENIX, USA: The semiconductor industry experienced an outstanding recovery in 2010. Revenues grew 32 percent, while units grew 25 percent. Manufacturers responded to the sharp increase in demand by spending almost $50 billion, a 91 percent increase over 2009, on capital equipment, buildings and land.
In 2011, Semico's forecast for the industry is an 8.3 percent increase in revenues and a 13.5 percent increase in units. Increasing economic uncertainty due to the political turmoil in North Africa and the Middle East, combined with rising gas prices, will help bring the industry back to a more normal growth pattern this year.
Semiconductor manufacturers have responded with a more subdued plan for capital spending this year. Capex for the industry as a whole will be up 15 percent over 2010, but could fall as much as 20 percent in 2012 as the economy slows and overcapacity drives down prices.
"Capital spending in 2011 is still strong, but more conservative at some companies than in 2010," said Adrienne Downey, Director of Technology Research at Semico. "Companies will become more skittish with their spending, so capex will fall 20 percent next year." Nine out of the top 20 semiconductor manufacturers will increase their spending this year, all at double- or even triple-digit increases.
Source: Semico Research, USA.