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Solid Rebound says : iSuppli, more growth ahead.

Solid Rebound

In fact, industry observer iSuppli, now part of IHS Inc., reported this week that the global semiconductor market will achieve the largest dollar increase in its history in 2010, courtesy of a boom in DRAM and NAND sales that is benefiting memory suppliers.

A preliminary forecast from iSuppli shows that worldwide semiconductor revenue will amount to $304 billion in 2010, up from $229.5 billion in 2009. This represents growth of 32.5 percent for the year. Percentage growth was higher in 2001 than in 2010, when revenue rose by 36.7 percent. However, revenue increased by $74.5 billion in 2010, a record increase that shattered the previous benchmark expansion of $59.2 billion in 2001.

"While many observers expected the semiconductor industry in 2010 to achieve a solid rebound following the deep drop of 2009, the actual growth far outstripped all expectations," said Dale Ford, senior vice president for market intelligence services for iSuppli. "The enormous expansion in semiconductor revenue was based on renewed demand for electronic equipment, such as computers, televisions and cell phones."

Ford added, however, that semiconductor sales in 2010 are set to rise at more than three times the rate of electronics equipment revenue. "This augmented growth is being driven by a range of multiplying factors, including inventory rebuilding, upward price pressure due to a supply/demand imbalance and an increase in the average semiconductor content of major electronic products," he said.

Moderate Growth Ahead

According to the KPMG survey, conducted in collaboration with the Semiconductor Industry Association, 80 percent of semiconductor executives polled expect that revenue will grow by more than 5 percent next year, a sign of resiliency, as 87 percent of 2009 respondents projected similar revenue increases. In looking at the jobs picture, 29 percent of the respondents predict workforce growth of greater than 5 percent, compared to 23 percent in 2009 and 17 percent in 2008 — reflecting increased confidence in the resilient semiconductor industry.

"Our findings show an industry that expects moderate growth next year, which is extraordinary in the context of an uneven global economic recovery," said Gary Matuszak, KPMG global chair for the Information, Communication and Entertainment practice. "The continuing demand for electronic products ranging from tablets to smartphones, and an increased demand for technology integration in automobiles will buoy semiconductor manufacturers as the economy fluctuates."