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Semicon revenues to scale Rs.14.01 lakh crore

Posted: 07 Sep 2010     Print Version  Bookmark and Share

Keywords:semiconductor  market  smart phone  tablet 

Gartner forecasts the 2010 semiconductor industry's global revenue to scale Rs.14.01 lakh crore ($300 billion). This is a 31.5 per cent increase from 2009 revenue of Rs.10.65 lakh crore ($228 billion). The growth spurt will taper off, however, to gain only 4.6 per cent in 2011 or Rs.14.66 lakh crore ($314 billion) in revenues next year.

2H 2010 growth is estimated to be below seasonal norms, as semiconductor sales align with electronic system sales. Research VP at Gartner, Bryan Lewis cites, "Semiconductor growth in the first half of 2010 was very strong, but it is becoming increasingly clear that the industry cannot maintain the momentum in the second half of 2010 and into 2011." He explains that, "While the impact of the European credit crisis has subsided, the global economic recovery is slowing, and there is concern that electronic equipment vendors are adopting a cautious stance, ready to cut production at the first signs of slowing customer orders."

The PC supply chain shows the most evidence of a correction, as demonstrated by recent company announcements, including Intel's lowering its third quarter guidance. Consumer PC purchases in mature markets were slightly weaker than expected in Q2 2010 and the outlook for the Q3 2010 is below seasonal growth. Nonetheless, surging sales of media tablets partially offsets the weakness in consumer PCs, since they've started to prove themselves as a popular substitute for netbooks.

In the mobile phone market, projections have been steadily improving throughout 2010. Application-specific semiconductors for the phone market are experiencing intense competitive pressure, with revenue growing only about 13 per cent in 2010. Smart phones continue to drive the mobile phone semiconductor market, representing 18 per cent of units and 36 per cent of overall 2010 mobile phone semiconductor revenue. Smart phone category market share will rise to about 41 per cent of total mobile phone units and 64 per cent of mobile phone semiconductor revenue by 2014, as entry-level smart phones trigger a second wave of market growth.

In the DRAM sector, profitability has also been good but a slowdown is ahead. "Due to early strength in the PC market and supply constraints, the DRAM industry has been very profitable, with revenue set to increase by 82.5 per cent to nearly Rs.1.96 lakh crore ($42 billion) in 2010," Lewis says. "However, during the second half of 2011, this is set to change, and we expect a DRAM downturn in 2012 as sales decline 29 per cent."

Alternatively, NAND revenue will sustain a growth trajectory through 2013, with the NAND flash market influenced by strong sales of smart phones and media tablets.

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