Global semiconductor revenue to grow 20 percent in 2010

STAMFORD, USA: Worldwide semiconductor revenue in 2010 is forecast to reach $276 billion in 2010, a 19.9 percent increase from 2009 revenue of $231 billion, according to the latest outlook by Gartner Inc.

“We have seen clear evidence that the semiconductor industry is poised for strong growth in 2010,” said Bryan Lewis, research vice president at Gartner.

“While the semiconductor market declined 9.6 percent in 2009, sequential quarterly revenue growth was amazingly strong through the last three quarters of 2009. After the gloom early in the year, PC unit production growth actually turned out to be positive in 2009 and is expected to grow close to 20 percent in 2010, fueling strength in semiconductors.

“Given the sales momentum and earlier cutbacks in capital spending, semiconductor foundry and packaging utilization rates are approaching constraints and most regions and most applications are seeing increased orders. The key question now is will the recovery continue at its current rate or will we see a correction?”

Gartner is closely tracking the balance of electronic system sales versus semiconductor sales and inventory in past downturns and the current one and believes that a minor correction in semiconductor sales is needed in the near future to rebalance chip sales with system sales.

The third quarter is generally the strongest quarter for semiconductor sales with sequential growth of 9 percent as system companies build product for back-to-school and the holiday season. Gartner’s new semiconductor forecast shows a 7 percent rise in third-quarter sales followed by a relatively flat fourth-quarter, which will better align semiconductor sales with system sales.

PCs and memory are the primary drivers for semiconductor revenue growth in 2010. “Rising DRAM prices coupled with strong PC demand will lead to over 55 percent DRAM revenue growth in 2010, making DRAM the fastest growing device type by far,” Mr. Lewis said.

Gartner analysts expect the semiconductor industry to show continued growth through its forecast period in 2014. The market is on track to surpass the $300 billion mark in 2012 when the market is forecast to total $304 billion.