After the semiconductor industry completed one of its most successful years in 2010, it now is positioned for continued but slower growth this year, according to the latest outlook by information technology research firm Gartner Inc., Stamford, Conn.

Worldwide semiconductor revenue is forecast to reach $314 billion in 2011, up 4.6 percent over the prior year, surpassing the $300 billion mark for the first time in its history. However, a modest chip correction began in the third quarter of 2010, and Gartner analysts estimate it’s going to last four quarters.

"Third-quarter sequential semiconductor revenue growth was below the seasonal norm, and company guidance indicates that fourth-quarter growth will also fall short and likely become negative for the first time in six quarters," says Bryan Lewis, research vice president. "The third quarter of 2010 was the turning point, as semiconductor manufacturing factory utilization rates peaked mid-year and subsequently started to reduce chip lead times and average selling prices."

From an application perspective, smart phones, mobile PCs and media tablets will fuel semiconductor growth through 2014, according to Gartner, which estimates that semiconductor revenue from media tablets will grow from $2.4 billion in 2010 to $17.8 billion in 2014.

In the personal computer market, consumer PC purchases have been below expectations, and the enterprise PC replacement cycle has weakened. However, some of this slowdown is being made up for by stronger-than-expected sales of media tablets.

The outlook for mobile phone production has improved, and overall semiconductor revenue from those products likely will reach a total of $48.7 billion when final numbers from 2010 are in, which would be a 23.2 percent increase from 2009. In 2011, worldwide semiconductor revenue from mobile phones is projected to reach $55.4 billion, a 13.6 percent increase from 2010.

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