Semiconductor revenues expected to rebound in '10

Semiconductor revenues in 2010 are expected to bounce back to the same levels as in 2008 at $255 billion, analyst firm Gartner said in its latest outlook.

However, the worldwide revenues in 2009 is expected to fall 11.4 per cent to $226 billion compared to the 2008 levels. This forecast, however, is better than the third quarter projections of Gartner when it said the semiconductor revenues in 2009 was expected to fall 17 per cent on an year-on-year basis.

“The most significant changes for the semiconductor industry came from application-specific standard products (ASSPs), memory and computer microprocessors, as all three products benefited from a strengthening PC market. ASSPs and memory, primarily NAND flash, also benefited from an improved outlook for cell phones,” said Bryan Lewis, research VP, Gartner.

He said the revenue forecast for the commodity memory market — DRAM and NAND flash — improved because of the stronger demand outlook. This means “pricing has strengthened more than previously forecast”, Lewis said.

According to Gartner, PCs are the single largest application driving the semiconductor rebound. The PC unit growth projections have improved from double-digit declines at the start of 2009 to the present low single-digit positive outlook.

The strong PC recovery has made microprocessors and DRAM two of the most noteworthy device categories of 2009. “Both device types experienced lower revenue declines than the industry average, and DRAM began to be profitable for some vendors in the third quarter of 2009 after almost three years of losses,” Lewis said.

On the flip side, the Gartner report says, a recent channel checks in Taiwan indicate there is a concern that PC orders are slowing earlier than the seasonal norm.

This might affect the consumption of semiconductor products in 2010.