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(DOW JONES) DJN: PRESS RELEASE: ISuppli Sees 2010 Global Semiconductor Rev Up
35.1% To $310.3B

El Segundo, Calif., August 2, 2010-Already pumped up by bulging demand, the
global semiconductor market in 2010 has been injected with a powerful dose
of growth steroids, prompting iSuppli Corp. to raise its revenue forecast to
a record level for the year.
iSuppli now predicts global semiconductor revenue in 2010 will rise by 35.1
percent to reach $310.3 billion, up from $229.6 billion in 2009. iSuppli's
previous forecast, issued on May 6, predicted growth of 30.9 percent this
year.
With an $80.7 billion increase, 2010 will bring the largest annual expansion
in semiconductor revenue in history in dollar terms. In comparison,
semiconductor revenue increased by slightly less than $60 billion during the
next best year for dollar chip growth: the dot-com-fueled year of 2000.
"The semiconductor market already was in for beefy growth in 2010 because of
strong consumer demand for electronic products," observed Dale Ford, senior
vice president for iSuppli. "However, it's now apparent that semiconductor
sales are getting an infusion of growth hormone in 2010 because of a number
of factors, including rising prices, inventory buildups and richer chip
content in key electronic products like smart phones and advanced LCD-TVs.
All this is causing chip revenue to bulge to awesome dimensions this year."
Working out with the equipment
Robust semiconductor revenue growth in 2010 is based on a strong increase in
the sales of electronic equipment. Factory OEM revenue for electronic
equipment is projected to grow by $131 billion to reach $1.54 trillion in
2010, up 9.3 percent from 2009. The previous high for electronics OEM
revenue was $1.53 trillion in 2008.
Shipment and revenue growth for electronics equipment is surpassing
expectations in areas including PCs, cell phones, LCD-TVs and other
semiconductor-rich products.
Pumped up prices, muscular chips
However, percentage semiconductor revenue growth will vastly exceed the
expansion of the end-equipment markets for a number of reasons, including
pricing.
"Careful management of semiconductor inventories and tight controls on
manufacturing capacity have resulted in an environment where supply is not
able to match demand," Ford said. "As a result, prices for many
semiconductor segments are inflated."
Furthermore, the adoption of innovative technologies both at the system and
component level is resulting in rising sales of highly integrated
semiconductors that capture a larger share of the value of electronics
systems. These integrated semiconductors tend to command higher pricing.
Following deep cost and inventory cutting efforts in 2009, the semiconductor
industry has been pushing to build up stockpiles across the supply chain to
support the strong growth in demand for electronics. This also has enhanced
semiconductor growth beyond what end demand would seem to dictate.
Bye bye bubble
While the growth of 2010 is being compared to that of the year 2000, it is
important to note that the nature of this cycle is completely different from
the 2000 period. The booming growth of 2000 followed a strong expansion in
1999 and was driven by an unsustainable bubble of demand. That bubble popped
in 2001 with a collapse of 28.6 percent. In contrast, the 2010 growth
represents a recovery from a collapse in the prior year of 2009 and is
forecasted to continue into 2011.
Double dip denied
"The most common word that is heard in the last month regarding the economy
and the semiconductor industry is 'double-dip,'" Ford observed. "Fears
abound that the market's recent success is too good to be true and that an
imminent correction is due. However, iSuppli does not agree with a
double-dip outlook. Rather, iSuppli projects a return to more standard
growth patterns in the second half of 2010 and into 2011 that will result in
semiconductor revenue growth of 7 percent next year."
The sequential semiconductor revenue increase of 8.2 percent in the second
quarter pf 2010 is expected to represent the peak growth period this year.
Growth will decelerate to 6.7 percent in the third quarter and to just 0.4
percent in the fourth quarter.
iSuppli projects that the industry will enjoy seven sequential quarters of
growth before a seasonal downturn occurs in the first quarter of 2011. This
will be the longest period of consecutive quarterly growth since the
industry grew by 19 straight quarters between 1991 and 1995.
Muscular memory
Looking at specific semiconductor device areas in 2010, the memory segment
will generate some of the strongest growth.
DRAM revenue will rise by more than 86 percent, while NAND flash memory will
expand in excess of 33 percent. This will cause overall memory revenue to
rise by 56 percent for the year.
Every major semiconductor category-i.e., microcomponents, logic, analog,
discretes and optical and sensors-is projected to rise by more than 25
percent in 2010.
Other major growth drivers in 2010 will be LEDs, Programmable Logic Devices
(PLDs), general-purpose analog ICs and discrete components. These market
segments are forecasted to see growth between 36 percent and 49 percent
during 2010. NOR flash memory is the only major semiconductor product
projected to not achieve double-digit growth in 2010.
The attached figures present iSuppli's annual and quarterly forecasts for
global semiconductor revenue.
To learn more about this topic, see iSuppli's new report, entitled:
Semiconductor Forecast Sees Strong Growth for 2010.
For more information, please contact:
Jonathan Cassell
Editorial Director and Manager, Public Relations
iSuppli Corporation
Office: 408.654.1714
Mobile: [phone]
www.isuppli.com
Or
Debra Jaramilla
Manager, Marketing
iSuppli Corporation
[e-mail]
310.524.4047
www.isuppli.com

(END) Dow Jones Newswires
August 02, 2010 12:40 ET (16:40 GMT)
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