The Semiconductor Market Proves it's Tougher than Nails

By Ed Silverstein June 22, 2011

Even with the continuing impact of the Japanese earthquake and rocky global economy – the worldwide semiconductor industry continues to expand.

In a new study IHS iSuppli projects that global semiconductor revenue will increase 7.2 percent during 2011.

The upbeat projection is driven by such factors as increased sales of tablet computers and smartphones.

Revenue from semiconductors will reach $325.9 billion during this year, compared to $304.1 billion in 2010, according to new projections from IHS iSuppli.

Earlier this year, the firm had predicted semiconductor revenue would increase by 7 percent during 2011.

Among the fastest-growing semiconductor segments during this year are: image sensors, NAND flash memory, light-emitting diodes, microprocessors, discrete components, sensors and general-purpose analog integrated circuits, IHS said.

Revenue from these products will increase over 12 percent this year, IHS adds.

In addition, complementary metal-oxide semiconductor (CMOS) image sensors will increase 36 percent during 2011, IHS projects.

“Thanks to the hardiness of the global electronics supply chain, the semiconductor industry is set for a year of solid growth in 2011,” Dale Ford, senior vice president for semiconductor market intelligence at IHS, said in a recent statement. “Neither the Japan quake disaster nor weak economic conditions will derail the market’s expansion.”

IHS also notes that semiconductor growth during 2011 is led by the wireless and mobile segments, with higher demand for media tablets, smartphones, e-book readers, solid state drives and handheld video game players.

In 2010, there was a 32.2 percent increase in the market caused by a rebound following the recession.

IHS projects that during 2012 and 2013 market growth will “moderate” and increase 4.8 and 4.0 percent, respectively, before increasing to 8.0 percent and 7.5 percent during the following two years.

“By 2015, semiconductor revenue will reach a milestone when it tops the $400 billion mark and hits $411.8 billion, equating to a compound annual growth rate of 6.3 percent between 2010 and 2015,” IHS said.

“Many exciting and innovative products will entice consumers to spend and support increases in electronics demand for 2011, driving continued semiconductor growth,” Ford said. “However, a key consideration will be whether the economy can maintain sufficient stability to support consumer confidence and spending.”

Japan’s massive earthquake, tsunami and related power outages impacted many industries earlier this year.

“Japan was already facing grim economic prospects when the earthquake in March plunged it into its worst crisis since World War Two,” Reuters noted in a story carried by TechZone360. “Now, the country confronts the tough balancing act of rebuilding its devastated northeast coast and revitalizing the economy while grappling with the underlying problems that put it into a two-decade economic slumber.”

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Ed Silverstein is a TechZone360 contributor. To read more of his articles, please visit his columnist page.

Edited by Jennifer Russell

TechZone360 Contributor

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