IHS raises chip market growth forecast

LONDON – The global semiconductor market will be worth $325.9 billion in 2011, an increase of 7.2 percent on a market of $304.1 billion in 2010, according to market research firm IHS iSuppli. This is up from the previous IHS iSuppli outlook issued in April, which predicted revenue would rise by 7 percent for the year.

IHS (El Segundo, Calif.) is also predicting a compound average growth rate of 6.3 percent over the period 2010 to 2015. The firm has moved its forecast in the opposite direction to Gartner Inc. (Stamford, Connecticut) which revised growth down to 5.1 percent from a previous figure of 6.2 percent.

EE Times issues a range prediction for 2011 that currently stands at between $315 billion and $328 billion, a percentage annual increase of between 5 and 10 percent.

IHS said that the chip market is showing "remarkable resilience in the face of the Japan disaster and uncertain economic conditions." The main reason for the raised prediction is soaring sales of smartphones and tablet computers, the firm said.

"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."  

Sequential quarterly growth is expected for the rest of 2011, with revenue rising by 2.9 percent in the second quarter and by 7.4 percent in the third. Following an annual 7.2 percent increase in 2011, growth will moderate, rising by 4.8 and 4.0 percent, before accelerating to 8.0 percent and 7.5 percent expansions during the next two years, IHS said.

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.