SAN FRANCISCO—Semiconductor industry revenue is projected to grow 5.1 percent in 2011, according to market research firm iSuppli Corp., which predicts the industry will enjoy a "soft landing" with modest growth after a booming 2010.
Chip sales are projected to grow to $317.4 billion next year from a projected $302 billion this year, according to iSuppli's forecast. The firm is currently projecting that 2010 chip sales will be up 32 percent compared to 2009, when the downturn caused the chip market to contract.
Analysts at iSuppli (El Segundo, Calif.) believe the semiconductor market will continue growing next year because of ongoing recovery in the global economy and electronics market, according to the firm. Chip market sales are projected to grow sequentially in each quarter of 2011, according to the firm's forecast.
ISuppli predicts the chip market will continue to grow steadily through 2014, when it is projected to reach $357.4 billion, according to the firm's forecast.
“Despite the resumption of growth in the semiconductor markets, enthusiasm is muted at best as the ghost of the recent economic downturn continues to haunt the industry,” said Dale Ford, senior vice president for market intelligence at iSuppli, in a statement. Ford said several factors, including unemployment and tight credit availability, continue to hinder consumer spending, the largest contributing factor to U.S. gross domestic product.
"Already, semiconductor revenue growth in the second half of 2010 is slowing compared to the more vigorous first half, and a slight sequential contraction in the fourth quarter is now projected,” Ford said. “Visibility for OEMs and semiconductor suppliers also has become limited for the end of the year, iSuppli semiconductor findings show.”
The data processing market segment, comprising computer systems and peripherals, will represent the largest application for semiconductors in 2010, accounting for 40 percent market share, according to iSuppli data. In particular, the PC business delivered an amazing performance during the first half of 2010, with shipments up 22.8 percent from the same period in 2009, the firm said.
ISuppli is offering Ford's latest report on semiconductor industry revenue for sale through the firm's website.