Chip market rebound coming, survey says

LONDON – A chip market rebound will help the U.S. move head of China as the most important market for revenue according to a global survey of semiconductor executives conducted by business consultancy KPMG.

The rebound is likely to begin in the second half of 2013, but 75 percent of the 152 executives polled said their companies' revenue growth will increase in the next fiscal year, compared to 63 percent a year ago. Also, two-thirds expect their workforce to expand, up from just 48 percent in last year's survey and 71 percent say annual industry profitability will increase over the next year.

The survey was conducted in September 2012 and the senior level executives polled were drawn from IDM, foundry and fabless chip companies.

The U.S. is growing in significance for the third year in a row, and fewer industry executives believe China will be the most important market for their company's semiconductor revenue growth three years from now. Executives said the U.S. will be the most significant market, followed by China and Europe, South Korea and Taiwan, KPMG said. Two years ago Taiwan was ranked second, ahead of the U.S.

In terms of growth of employment over the next 12 months China remains the leader. Significantly, fewer executives placed China among the top three markets for job growth during the next 12 months in this year's survey, while more placed the U.S. and Europe at the top.

Consumer electronics replaced wireless devices in the survey as the top semiconductor application, which may reflect the stranglehold achieved on the wireless device category by the likes of Apple and Samsung. More executives ranked industrial, medical, automotive and power management as important revenue drivers than in the previous three year's surveys, KPMG said.

This year, 53 percent of the executives said renewable energy technologies like batteries will be an important driver of revenue over the next three years, up from 36 percent a year ago.