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Electronics Production | October 26, 2010

Chip industry set for soft landing in 2011

Although the semiconductor industry in 2011 will not repeat the blowout performance anticipated for this year, growth will continue because of the ongoing recovery in the global economy and electronics market, according to the electronics market researcher iSuppli.
Global semiconductor revenue in 2011 will reach USD 317.4 billion, up a modest 5.1% from USD 302.0 billion projected for this year. The slight uptick cannot compare to the torrid 32.0 percent increase the industry will see in 2010. However, with the worst of the recession behind us, revenue will continue to climb steadily after this year. Semiconductor revenue will rise to approximately USD 357.4 billion in 2014.

“Despite the resumption of growth in the semiconductor markets, enthusiasm is muted at best as the ghost of the recent economic downturn continues to haunt the industry,” said Dale Ford, senior vice president for market intelligence at iSuppli.

“Several factors bearing witness to the wretched effects of the recession—among them stubborn unemployment, tight credit availability and the lack of recovery in the housing market—are hindering consumer spending, the largest contributing factor to the U.S. Gross Domestic Product.”

Furthermore, there are indications that softening demand will take hold in some segments, starting in the fourth quarter and continuing through the first quarter of 2011.

Just the same, revenue has recovered and is back in 2010 to pre-recession levels in almost all sectors. And the normal seasonal pattern of a weak first quarter followed by strong growth accruing over the remainder of the year—a pattern interrupted this year—will return in 2011, with each quarter experiencing sequential growth.

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