infoTECH Feature

July 07, 2010

Global Semiconductor Revenues to Exceed $340 Billion in 2014

Market research firm International Data Corporation's latest report shows that global semiconductor revenues will surpass $340 billion in next four years.

Predicted to grow at a compound annual growth rate (CAGR) of 8.8 percent over the forecast period 2009-2014, the worldwide chip sales are projected to reach $344 billion in 2014 from $274 billion in 2010 and $295 billion in 2011.

According to IDC (News - Alert), the strong double-digit PC semiconductor revenue growth in 2010 (greater than 35 percent year-over-year), primarily driven by mobile PC applications followed by strong growth in enterprise spending in 2011 and 2012, will help achieve a healthy CAGR of 12.2 percent (2009-2014) for the computing industry segment.

Likewise, the IDC study shows that double-digit semiconductor revenue growth in converged mobile devices (smartphones) will also help the wireless industry segment to achieve a record $59.3 billion this year. However, the report cautions that with average memory content in handsets stabilizing and continued pressure on pricing, high-single digit growth is projected to return in 2011 and 2012.

In the industrial, military and aerospace, as well as the automotive industry segments, semiconductor revenues are expected to achieve year-over-year growth of more than 20 percent in 2010 and a strong five-year CAGR of 13.2 percent. New markets such as alternative energy, light-emitting diode (LED) based lighting, and increased semiconductor content in automobiles are responsible for driving this growth, as per IDC.

However, semiconductor revenue projection for the consumer industry is not as good. This year the consumer segment is expected to experience a year-over-year growth of only 5.8 percent. And this growth is predicted to drop further in the coming five years. While revenues for the digital TV (DTV) and media tablet markets are expected to show strong growth, those for the other device application markets, such as PMP flash, are expected to post sharp declines, as per the IDC's market projection.

Among semiconductor devices, revenues for the memory sector (DRAM and Flash) will reach $66.7 billion this year (greater than 52 percent year-over-year growth), propelled by increased demand for memory in mobile PCs, mini-notebooks (netbooks), media tablets, and smartphones. But, with technology transitions, increased price pressures, and more supply coming online, revenues for the memory market are expected to be flat or slightly decline in 2011 and 2012.

'Overall, we believe that the semiconductor market recovery seen this is year is similar to the one in 2004. The 2010 growth rate based on the bottoms-up model used in the Semiconductor Application Forecaster (SAF) is consistent with our top-down linear-regression model that factors in seasonality in semiconductor orders and with our scenario analysis model,' said Mali Venkatesan, research manager, Semiconductors at IDC, who also led the study and compiled the SAF data.

'However, global economic recovery that started in the second half of 2009 is in danger of slowing down due to macroeconomic problems such as the Euro crisis, continued high unemployment in the U.S., with the associated low consumer sentiment, and the fear of an asset bubble in the BRIC (Brazil, Russia, India and China) countries. In such a scenario, the expected growth in the second half of 2010 may be pushed into early 2011. Nevertheless, we believe device applications such as smartphones, mobile PCs, media tablets, and automotive will show strong secular growth both in 2010 and 2011,' added Venkatesan.
 

Ashok Bindra is a veteran writer and editor with more than 25 years of editorial experience covering RF/wireless technologies, semiconductors and power electronics. To read more of his articles, please visit his columnist page.

Edited by Patrick Barnard
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