'Semicon industry set for soft landing in 2011'

CIOL Bureau
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EL SEGUNDO, USA: Although the semiconductor industry in 2011 will not repeat the blowout performance anticipated for this year, growth will continue because of the ongoing recovery in the global economy and electronics market, according to the electronics market research firm iSuppli Corp.


Global semiconductor revenue in 2011 will reach $317.4 billion, up a modest 5.1 per cent from $302 billion projected for this year, said the research firm. The slight uptick cannot compare to the torrid 32 per cent increase the industry will see in 2010. However, with the worst of the recession behind us, revenue will continue to climb steadily after this year. Semiconductor revenue will rise to approximately $357.4 billion in 2014, it added.

“Despite the resumption of growth in the semiconductor markets, enthusiasm is muted at best as the ghost of the recent economic downturn continues to haunt the industry,” said Dale Ford, senior vice president for market intelligence at iSuppli.

“Several factors bearing witness to the wretched effects of the recession — among them stubborn unemployment, tight credit availability and the lack of recovery in the housing market — are hindering consumer spending, the largest contributing factor to the U.S. Gross Domestic Product,” Ford added.


Furthermore, there are indications that softening demand will take hold in some segments, starting in the fourth quarter and continuing through the first quarter of 2011.

“Already, semiconductor revenue growth in the second half of 2010 is slowing compared to the more vigorous first half, and a slight sequential contraction in the fourth quarter is now projected,” Ford said, adding, “Visibility for OEMs and semiconductor suppliers also has become limited for the end of the year, iSuppli semiconductor findings show.”

Just the same, revenue has recovered and is back in 2010 to pre-recession levels in almost all sectors. And the normal seasonal pattern of a weak first quarter followed by strong growth accruing over the remainder of the year will return in 2011, with each quarter experiencing sequential growth, said iSuppli.

Among the various markets that consume semiconductors, the data processing segment comprising computer systems and peripherals will represent the largest application in 2010, accounting for 40 percent market share, according to iSuppli’s electronic equipment forecast. In particular, the PC business delivered an amazing performance during the first half of 2010, with shipments up 22.8 percent from the same period in 2009.

In second place among the categories, with 20 percent share of market, is wireless communications, while consumer electronics is third with a 19 per cent share, added iSuppli.