Semiconductor industry is just fine with record 2010 growth

The doom and gloom in forecasts over the global semiconductor industry has been cast asunder by a report from the Semiconductor Industry Association (SIA), announcing that 2010 saw a global sales record pulling in $298.3 billion over 2010. 

2009 saw overall sales of $226.3 billion, meaning 2010 saw roughly 32 percent growth year on year. While Q4 generally brings about bad weather, December 2010’s sales were 12.2 percent above water on December 2009. The fourth quarter drooped four percent from the previous quarter but again increased 12.2 percent year-on-year. 

Every major semiconductor product category, according to the SIA, reported double digit growth for 2010. 

Semiconductor analyst Malcolm Penn at Future Horizons told us last week that the whole industry is playing a numbers game – but they may be looking at the wrong numbers. “Now it is thought that the industry is only set to see single digit growth in 2011, but in reality the market has just stayed roughly the same for quite a while now.” 

The SIA forecasts single digit growth for 2011 but says in the face of those three-year-buzzwords, the economic downturn, the semi industry is doing well. The proliferation of electronics means chips and semiconductors will enjoy a fruitful future.

Penn told TechEye the main concern is capacity. “The two biggest firms [UMC and TSMC] are now struggling to keep up with production due to a lack of investment in the past. At the moment, as fast as you can add the capacity, it is getting used up – so if there had been none at all then the situation would be even worse. Whereas this time last year the problem wasgetting any orders, the problem today is getting semiconductor product.”

Single digit growth may be encouraging but interesting developments plan to throw a spanner in the works. According to iSuppli, the only companies which will be involved in large scale 22 and 20 nm processes, by the end of the year, could be TSMC, GloFo and Samsung

GlobalFoundries meanwhile plans to rake in top dollars with outsourcing for the likes of Toshiba and others.