Semiconductor industry to cross $300 bn mark in 2010

As the semiconductor industry completes one of its most successful years in 2010, the market is positioned for continued, albeit slower, growth in 2011, according to the latest outlook by IT research and advisory firm Gartner Inc.

Worldwide semiconductor revenue is forecast to total $314 billion in 2011, up 4.6 per cent from 2010's estimated revenue of $300.3 billion.

Worldwide semiconductor revenue is on pace to grow 31.5 per cent in 2010, as the industry is expected to surpass the USD 300-billion mark for the first time in its history.

However, a modest chip correction began in the third quarter of 2010, and Gartner analysts estimate it's going to last four quarters.

"Third-quarter sequential semiconductor revenue growth was below the seasonal norm, and company guidance indicates that fourth-quarter growth will also fall short and likely become negative for the first time in six quarters," said Bryan Lewis, research vice president at Gartner.

He said: "The third quarter of 2010 was the turning point, as semiconductor manufacturing factory utilisation rates peaked midyear and subsequently started to reduce chip lead times and average selling prices. Strong holiday electronic sales will be important in keeping the modest chip correction in check as we start 2011."

The memory segment forecast calls for the strongest semiconductor growth in 2010 as revenue would increase 49.8 per cent. However, the memory market is the only segment forecast to decline in 2011, with revenue forecast to decrease 2.4 per cent.

From an application perspective, smartphones, mobile PCs and media tablets would fuel semiconductor growth through 2014.

Media tablets are seeing rapid growth due to the success of the Apple iPad, and the market would continue to see strong growth with greater competition in this space.

Gartner estimates that semiconductor revenue from media tablets would grow from $2.4 billion in 2010 to $17.8 billion in 2014.