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Semiconductor market strengthens in 2010 says Gartner

Global semiconductor market to hit $300 billion this year according to analysts

The semiconductor market is performing better than expected, but growth will slow into 2011, says Gartner.
The semiconductor market is performing better than expected, but growth will slow into 2011, says Gartner.

Gartner is predicting stronger growth than expected for the worldwide semiconductor market in 2010.

The analyst company is predicting a 31.5% growth in the market, to $300 billion in 2010, up from $228 billion in 2009. The estimate is up from Gartner's earlier forecast, in Q2 of this year, of 27.1% growth for the year, but despite record revenue, growth in the second half will be below seasonal norms, and 2011 is only forecast for 4.6% growth.

"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," said Bryan Lewis, research vice president at Gartner. "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."

In the consumer PC segment, Gartner said that purchases in mature markets were weaker than expected in the second quarter, third quarter growth would not match seasonal growth, although this would be offset by strong growth in media tablet sales, which are replacing netbooks.

The mobile phone processor market remains intensively competitive, with revenues only expected to grow by 13% in 2010, with smartphones dominating the market, accounting for 18% of units and 36% of overall 2010 mobile phone semiconductor revenue.

Gartner also reports that DRAM revenue growth is set to peak in 2010, Lewis explained: "|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% to nearly $42 billion in 2010. However, during the second half of 2011, this is set to change, and we expect a DRAM downturn in 2012 as sales decline 29%."

In contrast, NAND revenue is set to sustain a growth trajectory through 2013, with the NAND flash market driven by strong sales of smartphones and media tablets.