Chip sales growth to slow in 2011 - iSuppli

SEOUL, S.KOREA: Global semiconductor sales growth is set to slow next year due to an uncertain economic environment but the sector is not facing a dramatic downturn, market research firm iSuppli said.

iSuppli said on Thursday global semiconductor sales in 2011 are expected to climb by 5.1 per cent, a significant slowdown from this year's projected growth of 32 per cent.

The 2010 forecast was trimmed from a previous estimate of 35.1 per cent, due to weakening consumer demand and rising inventories.

"Unstable economic conditions and worrisome market reports continue to create an environment of poor visibility and ongoing uncertainty in the electronics industry," Dale Ford, senior vice president at iSuppli, said in a statement.

"However, based on its most recent analysis of the electronics supply chain, iSuppli expects the chip business to experience a soft landing in 2011 and not to suffer the kind of dramatic downturn seen in 2009."

iSuppli expects semiconductor sales to drop 0.3 percent in the fourth quarter from the previous quarter, the first sequential drop since the market collapse in late 2008.

The economic slowdown has dampened consumer demand for PCs, the major application for chips, dragging down chip prices.

Still, the global chip industry is forecast to post a record-setting revenue of $302 billion this year, up from $228 billion in 2009 as it has rebounded from its worst-ever downturn, according to iSuppli.