Semiconductor sales record rise worldwide

Semiconductor demand is on the rise for at least the rest of this year

Sales of semiconductors this year are tipped to reach $300 billion (£194.1 billion), a 31.5 per cent rise on 2009, before flattening out in 2011, according to Gartner analysis.

Semiconductor revenues will thus hit record levels globally, Gartner said. But the firm has projected worldwide semiconductor revenue will then grow slower to a total of $314 billion in 2011, 4.6 per cent up on 2010.

“Semiconductor growth in the first half of 2010 was very strong, but it is becoming increasingly clear that the industry cannot maintain the momentum in the second half of 2010 and into 2011,” said Bryan Lewis, research vice president at Gartner.

Lewis said that the global recovery is slowing although the impact of the European credit crisis has subsided.

“There is concern that electronic equipment vendors are adopting a cautious stance, ready to cut production at the first signs of slowing customer orders,” he added.

The PC supply chain is showing the most evidence of a correction, as can be seen by recent company announcements, including Intel's lowering its third-quarter guidance, according to Lewis.

The mobile phone semiconductor category, though, looked rosier. Gartner figures suggest the outlook for mobile phones has been steadily brightening, with total growth of 13 per cent this year now expected – higher than in the market-watcher’s Q2 update. Smartphone demand in particular was a main driver this quarter.

DRAM revenue is set to peak this year, although NAND incomes are expected to grow through 2013.

“Due to early strength in the PC market and supply constraints, the DRAM industry has been very profitable, with revenue set to increase by 82.5 per cent to nearly $42 billion in 2010,” said Lewis. “During the second half of 2011 this is set to change and we expect a DRAM downturn in 2012 as sales decline 29 per cent.”