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February 23, 2010

Global semiconductor revenue to increase 20% in 2010, says Gartner

Expects DRAM to be the fastest growing device type

By CBR Staff Writer

Worldwide semiconductor revenue is expected to increase by 19.9% to reach $276bn in 2010, compared to $231bn in 2009, driven primarily by PCs and memory drivers, according to the new report from Gartner.

Gartner said that it believes a minor correction in semiconductor sales is needed in the near future to rebalance chip sales with system sales. It expects a 7% rise in third-quarter sales followed by a relatively flat fourth-quarter, which will better align semiconductor sales with system sales.

The research firm said that the third quarter is the strongest quarter for semiconductor sales with sequential rise of 9% as system companies build product for back-to-school and the holiday season. It predicts that rising DRAM prices coupled with strong PC demand will lead to over 55% DRAM revenue growth in 2010, making DRAM the fastest growing device type by far.

Gartner analysts expect the semiconductor industry to show continued growth through its forecast period in 2014 and expects the market to surpass the $300bn mark in 2012 when the market is forecast to total $304bn.

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Bryan Lewis, research vice president at Gartner, said: “We have seen clear evidence that the semiconductor industry is poised for strong growth in 2010. While the semiconductor market declined 9.6% in 2009, sequential quarterly revenue growth was amazingly strong through the last three quarters of 2009.

“After the gloom early in the year, PC unit production growth actually turned out to be positive in 2009 and is expected to grow close to 20% in 2010, fueling strength in semiconductors. Given the sales momentum and earlier cutbacks in capital spending, semiconductor foundry and packaging utilisation rates are approaching constraints and most regions and most applications are seeing increased orders.”

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