The global semiconductor market is forecast to grow nine percent in 2011, reaching $303 billion, according to International Data Corp. (IDC), Framingham, Mass. The semiconductor market rebounded in 2010, growing 23 percent, according to the market research firm.
IDC’s latest Semiconductor Application Forecaster (SAF), December 2010, also projects a six percent compound annual growth rate (CAGR) for the 2010 to 2015 forecast period.
However, IDC noted that several issues could negatively impact the semiconductor market in 2011, including high unemployment, the Euro crisis, and a commodity-driven asset bubble in Brazil, Russia, India and China (BRIC) countries.
The computing industry segment accounts for about 40 percent of all semiconductor revenues and is projected to grow seven percent in 2011, after reaching $113 billion in 2010, said IDC. CAGR is pegged at six percent from 2010 to 2015.
IDC expects the launch of Intel’s Sandybridge and AMD’s Fusion APU in 2011 to help drive the PC replacement cycle and semiconductor demand into 2012.
Another key driver for IC growth is smart phones, which helped the communications sector to reach $80 billion in 2010 despite continued price pressure on cellular baseband and connectivity chipsets, particularly for low-end phones in China, said IDC. Since markets for these chipsets extend beyond smart phones, IDC expects long-term volume growth.
IDC also forecasts long-term telecom spending primarily due to the continued growth of IP traffic and smart devices on the network, as well as spending levels of service providers. The market research firm expects the communications industry segment to grow nine percent in 2011 with a CAGR of five percent over the forecast period.
Thanks to high growth in semiconductor revenues from media tablets, e-readers, and LED/LCD TV sets, which is helping to balance flat or decreased revenue growth from traditional consumer devices such as DVD players and game consoles, IDC said the consumer industry segment will grow 10 percent in 2011 with a five percent CAGR from 2010 to 2015.
Together, the automotive and industrial segments are forecast to grow 13 percent in 2011 with a CAGR of 10 percent over the forecast period, reported IDC. Key drivers for IC growth in these sectors include infotainment, safety and diagnostic systems, engine control, energy/battery management, M2M, smart grid, LED lighting, and factory automation.
Semiconductor devices expected to fuel growth over the next five years include microprocessors, microcontrollers, and ASSPs, while growth for memory devices including Flash and DRAM are expected to decline with a combined CAGR of zero to one percent.
Asia/Pacific continues to grow its share of semiconductor revenues, reaching more than 43 percent in 2015, said IDC.
Intel remains leading IC maker
Intel Corp. remained the No. 1 semiconductor vendor for the 19th consecutive year in 2010, although its market share fell slightly from 14.2 percent in 2009 to 13.8 percent in 2010, according to Gartner, Inc.
Gartner reported that Intel experienced strong growth in the first half of 2010 as the PC market stocked up inventory, getting ready for a strong second half, which didn’t materialize due to weakened consumer confidence.
Top 10 Worldwide Semiconductor Vendors, Preliminary Ranking by Estimated Revenue (Millions of U.S. Dollars)
Rounding out the top five IC makers are Samsung Electronics, Toshiba, Texas Instruments and Renesas Electronics (No. 5 following the merger of NEC Electronics and Renesas Technology in April).
Samsung enjoyed a strong growth year due to DRAM and NAND flash markets with memory accounting for more than 80 percent of the company’s sales, said Gartner.
Toshiba also grew its NAND flash memory business for mobile devices, along with its discrete, ASIC and ASSP device businesses while Texas Instruments grew its overall semiconductor revenue by 35.2 percent, and its analog revenue by more than 41 percent.
Similar to IDC’s forecast, the Stamford, Conn.-based market research firm pegs worldwide revenue for semiconductors at $300.3 billion in 2010, up 31.5 percent from 2009. Gartner expects the market to slow in 2011, growing only 4.6 percent to reach $314 billion.
Gartner analysts said a chip correction started in the third quarter of 2010 and it’s expected to extend into four quarters.
“In 2010, the semiconductor market was driven by pent-up demand as system makers scrambled against depleted inventories to obtain parts,” said Stephan Ohr, semiconductor research director at Gartner, in a statement. “Manufacturers — both integrated device manufacturers (IDMs) and foundries — scrambled to put new capacity in place. With slowing demand and a weakening consumer confidence in the third quarter, lead times are coming down and inventories are slowly starting to build. Still, semiconductor vendors are working on fulfilling backlog orders, and 2010 will go on record as a banner year for the semiconductor industry.”
According to Gartner’s report, “Market Share Analysis: Preliminary Total Semiconductor Revenue, Worldwide, 2010, ” the semiconductor industry revenue grew $71.9 billion in 2010, which the market research firm reports as the largest single dollar increase for the semiconductor industry in any one year. Gartner said only in 1988, 1995 and 2000 did the semiconductor industry grow revenue by more than 30 percent in one year.