Global semiconductor revenue is expected to reach $344 billion (£226 billion) by 2014, according to new figures released today by International Data Corporation (IDC).
IDC forecasts that revenue for semiconductors will be up to $274 billion (£180 billion) this year, $295 billion (£194 billion) in 2011, and jumps to $344 billion (£226 billion) by 2014, which means a compound annual growth rate of 8.8 percent from 2009 to 2014. This is very good news for the industry, which saw a woeful 9 percent drop in revenue last year as the recession ate into most sectors’ profits.
The outlook is even better for the computing industry, with an expected compound annual growth rate of 12.2 percent over the same five year period. The reasons for such strong growth include high demand for PC semiconductors, which have seen growth of over 35 percent year on year. Mobile PC applications and enterprise upgrades over the next few years are also expected to aid in pushing growth within this sector.
The success of smartphones has resulted in a record revenue of $59.3 billion (£39 billion) for the wireless industry sector of the semiconductor business. IDC forecasts that the current double-digit growth in this area will fall to single-digit figures in 2011 and 2012 as the market stabilises and competition drives prices down.
Semiconductor revenues for memory, including DRAM and Flash, will rise to $66.7 billion (£44 billion) this year, a growth of over 52 percent compared to last year. This increase is primarily fuelled by high memory demand for the netbook, smartphone, and tablet markets, but IDC expects a potential decrease in memory sales over the next few years as supply outgrows demand.
The industrial, military, aero, and automative industries also had a huge craving for semiconductors, with revenue growth up 20 percent this year compared to last. Energy-efficient lighting and the increased usage of semiconductors in cars is expected to drive a compound annual growth rate of 13.2 percent between 2009 and 2014.
The consumer industry is less fortunate, with a modest 5.8 percent growth this year, which IDC expects will fall sharply over the next few years.
“Overall, we believe that the semiconductor market recovery seen this year is similar to the one in 2004. The 2010 growth rate based on the bottoms-up model used in the Semiconductor Application Forecaster is consistent with our top-down linear-regression model that factors in seasonality in semiconductor orders and with our scenario analysis model,” said Mali Venkatesan, research manager for semiconductors at IDC.
Venkatesan qualified this growth expectation with the possibility of a slowdown in global economic recovery due to the Euro crisis, US unemployment, and an assest bubble in the BRIC countries. He said that this may push growth from the second half of this year into 2011, but said that, despite this, smartphones, mobile PCs, tablets, and cars will still see strong growth in 2010 and 2011.