IHS iSuppli has raised its forecast slightly for global semiconductor revenue from 7 percent to 7.2 percent for 2011, while Gartner Inc. lowered its projections from 6.2 percent to 5.1 percent in 2011. Both market research firms believe that demand for tablets and smart phones will be big growth drivers in the upcoming years.
New research from IHS iSuppli, El Segundo, Calif., indicates that the global semiconductor industry will reach $325.9 billion, up from $304.1 billion in 2010, driven in part by increasing demand for consumer electronics products including tablets and smart phones.
Gartner Inc., Stamford, Conn., forecasts global semiconductor revenue will reach $315 billion in 2011, up from $299 billion in 2010. Similarly, Gartner analysts expect two-thirds of semiconductor revenue growth to come from smart phones and tablets through 2013.
Meanwhile, the Semiconductor Industry Association (SIA) has endorsed the World Semiconductor Trade Statistics (WSTS) organization’s mid-year global semiconductor sales forecast, which has projected chip sales to grow by 5.4 percent to reach $314.4 billion in 2011. This is an increased projection over the November 2010 WSTS forecast of 4.5 percent growth for 2011, said SIA.
Both IHS and Gartner analysts believe that the Japan earthquake and tsunami will not significantly impact the semiconductor industry’s growth this year.
“Thanks to the hardiness of the global electronics supply chain, the semiconductor industry is set for a year of solid growth in 2011, said Dale Ford, senior vice president for semiconductor market intelligence at IHS, in a statement.”Neither the Japan quake disaster nor weak economic conditions will derail the market’s expansion. In fact, demand has been so strong for semiconductors in hot consumer items such as tablets and smart phones that IHS has raised its forecast slightly to accommodate the improved outlook.”
Gartner analysts say “the earthquake and tsunami in Japan raised concerns about the supply of silicon wafers, batteries, crystal oscillators, packaging and other specialized materials. However, supply constraints due to the situation in Japan have not derailed the electronics industry.”
“The disaster in Japan clearly had an impact on the semiconductor market, and supply chain behavior, but it is less than initially feared,” said Peter Middleton, principal research analyst at Gartner, in a statement. “In response, in the last two weeks of March, vendors stepped up efforts to secure supply in the face of uncertainty and potential shortfalls — leading to some double ordering which continued into the second quarter. We think vendors were cautious with their second quarter guidance, and we expect the majority will exceed those estimates.”
Middleton expects “an effort to draw down inventory, which will weaken the semiconductor market in late 2011 and early 2012.”
IHS projects that growth will be moderate over the next two years, growing by 4.8 and 4.0 percent, followed by 8.0 percent and 7.5 percent growth rates in 2014 and 2015, respectively. The market research firm expects semiconductor revenue to reach $411.8 billion by 2015, delivering a compound annual growth rate of 6.3 percent between 2010 and 2015.
Wireless communications will be the largest growth driver, increasing semiconductor revenue in 2011 by 17.6 percent, said IHS iSuppli. The smaller industrial electronics segment will be the second-fastest growing semiconductor application market, with revenue rising by 7.3 percent, followed by data processing with growth of 6.2 percent, reported IHS. Slower expansion sectors will include consumer electronics at 3.1 percent and automotive electronics at 3.0 percent.
However, IHS says semiconductor revenue for wired communications will contract by 1.7 percent, the only sector to experience negative growth.
The fastest-growing semiconductor product segments in 2011 will be image sensors, NAND flash memory, light-emitting diodes, microprocessors, discrete components, sensors and general-purpose analog integrated circuits. Revenue from these products is projected to rise by more than 12 percent in 2011, with complementary metal-oxide semiconductor (CMOS) image sensors leading all products with 36 percent growth, said IHS iSuppli.
Gartner forecasts worldwide application-specific standard product (ASSP) revenue to reach $79.7 billion in 2011 and $99.4 billion by the end of 2015. However, the market research firm expects the highest overall growth through 2015 will come from non-optical sensors, which are primarily driven by automotive applications. Analysts also predict high growth from increased sensor use in applications outside automotive, particularly smart phones, tablets and video game hardware.