SEMICONDUCTORS
ChipMaRket Revenue up–anD so aRe pRiCes
By ESNA staff
ISuppli Corp. and othermarket researchers have raised their growth expectations for theworldwide semiconductormarket. However, they add, demand is going to outstrip supply for some time.
Most recently, iSuppli reported “the global semiconductormarket
in 2010 has been injectedwith a powerful dose of growth steroids, prompting iSuppli Corp. to raise its revenue forecast to a record level for the year.” iSuppli nowpredicts global semiconductor revenue in 2010will rise by 35.1%to reach $310.3 billion, up from$229.6 billion in 2009. iSuppli’s previous forecast, issued onMay 6, predicted growth of 30.9%this year.
However, percentage semiconductor revenue growthwill vastly
exceed the expansion of targeted end-equipmentmarkets for a number of reasons, including pricing. “Carefulmanagement of semiconductor inventories and tight controls onmanufacturing capacity has resulted in an environmentwhere supply is not able to match demand,” said Dale Ford, senior vice president for iSuppli. “As a result, prices formany semiconductor segments are inflated.”
Furthermore, according to iSuppli, the adoption of innovative
technologies both at the systemand component level is resulting in rising sales of highly integrated semiconductors that capture a larger share of the value of electronics systems. These integrated semiconductors tend to command higher pricing.
Following deep cost and inventory cutting efforts in 2009, the
semiconductor industry has been pushing to build up stockpiles across the supply chain to support the strong growth in demand for electronics. This also has enhanced semiconductor growth beyond what end demandwould seemto dictate.
Robust expansion With an $80.7 billion increase, 2010will bring the largest annual expansion in semiconductor revenue in history in dollar terms, according to iSuppli. In comparison, semiconductor revenue increased by slightly less than $60 billion during the next best year for dollar chip growth: the dot-com-fueled year of 2000. “The semiconductormarket already was in for beefy growth in
2010 because of strong consumer demand for electronic products,” said Ford. “However, it’s now apparent that semiconductor sales are getting an infusion of growth hormone in 2010 because of a number of factors, including rising prices, inventory buildups and richer chip content in key electronic products like smart phones and advanced LCD-TVs. All this is causing chip revenue to bulge to awesome dimensions this year.”
Bye bye bubble While the growth of 2010 is being compared to that of the year 2000, it is important to note that the nature of this cycle is completely different fromthe 2000 period. The booming growth of
20 | September 2010
2000 followed a strong expansion in 1999 andwas driven by an unsustainable bubble of demand. That bubble popped in 2001with a collapse of 28.6%. In contrast, the 2010 growth represents a recovery froma collapse in the prior year of 2009 and is forecasted to continue into 2011.
iSuppli has raised its growth expectations for the 2010 semiconductormarket
Double dip denied “Themost common word that is heard in the lastmonth regarding the economy and the semiconductor industry is ‘double-dip,’” Ford observed. “Fears abound that themarket’s recent success is too good to be true and that an imminent correction is due. However, iSuppli does not agree with a double-dip outlook. Rather, iSuppli projects a return tomore standard growth patterns in the second half of 2010 and into 2011 that will result in semiconductor revenue growth of 7% next year.” The sequential semiconductor revenue increase of 8.2% in the
second quarter of 2010 is expected to represent the peak growth period this year. Growth will decelerate to 6.7% in the third quarter and to just 0.4% in the fourth quarter.
iSuppli projects that the industry will enjoy seven sequential
quarters of growth before a seasonal downturn occurs in the first quarter of 2011. This will be the longest period of consecutive quarterly growth since the industry grew by 19 straight quarters between 1991 and 1995.
Muscularmemory Looking at specific semiconductor device areas in 2010, thememory segmentwill generate some of the strongest growth. DRAMrevenuewill rise bymore than 86%,while NAND flash
memorywill expand in excess of 33%. Thiswill cause overall memory revenue to rise by 56%for the year.
Everymajor semiconductor category—i.e.,microcomponents,
logic, analog, discretes and optical and sensors—is projected to rise bymore than 25%in 2010. Othermajor growth drivers in 2010will be LEDs, Programmable Logic Devices (PLDs), general-purpose analog ICs and discrete components. Thesemarket segments are forecasted to see growth between 36%and 49%during 2010. NOR flashmemory is the onlymajor semiconductor product projected to not achieve double-digit growth in 2010.
The attached figures present iSuppli’s annual and quarterly
forecasts for global semiconductor revenue.
www.isuppli.com
www.electronics-sourcing.com
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68