Chip manufacturers to experience slow growth in 2011

The Semiconductor Industry Association (SIA) predicts chip growth will slow next year.

The association, which represents American chip makers said 2010 would be a record high for chip revenue, which will rise 32.8 percent this year to $300.5 billion. It said this was the  first time it had reached the $300 billion mark. However this would slump in 2011 with only a rise of six percent to $318.7 billion

SIA President Brian Toohey, said in a statement: “We experienced record sales this year due to strong global demand across a broad range of end markets.

“We expect more moderate growth through 2012 as the economy recovers and consumer confidence restores.”

According to SIA the record growth in 2010 was driven by demand for PCs, mobile phones, and new devices including the iPad. It was also down to a global recovery after the sharp downturn last year with chip makers producing more chips to refill global inventories.

Earlier this week the organisation released figures of worldwide sales of semiconductors. In September it noted that these reached $26.5 billion in September, a gain of 2.9 percent from the prior month when sales were $25.8 billion. Sales for the third quarter of 2010 amounted to $79.4 billion, a 6.1 percent increase from the previous quarter when sales were $74.8 billion. Third quarter sales were 26.2 percent higher than the $62.9 billion for the like period in 2009.
At the time Toohey said: “Semiconductor sales have grown steadily in all regions through the third quarter of 2010, with strong demand in consumer and industrial electronic products.

“Inventory for the industry continues to be generally in balance with demand.  
“We could see moderation in the growth rate through the end of the year as demand for consumer electronic products such as personal computers, flat panel televisions, and mobile devices are potentially impacted by continuing economic uncertainty,” Toohey concluded.