Worldwide semiconductor market on course for record revenues

The global semiconductor market is on course to generate record revenues in 2010, on the back of soaring demand for DRAM and NAND memory, according to a forecast from market research firm iSuppli.

Worldwide semiconductor revenue will peak at $304bn (£196bn) in 2010, up 32.5 per cent on 2009. All major categories within the semiconductor market except NOR Flash and specialty memory are projected to achieve double-digit revenue growth, according to the forecast.

DRAM and NAND Flash memory market segments are set to grow by 80 per cent and 40 per cent respectively, while 90 per cent of the 150 semiconductor suppliers will see an increase in revenue, iSuppli noted.

Intel, Samsung, Toshiba and Texas Instruments are on course to remain the top four suppliers, unchanged from last year. Japanese manufacturer Renesas Electronics has jumped up four places to fifth as a result of merger and acquisition activity helping to achieve 129 per cent growth.

Despite the relatively modest growth of worldwide car sales, the automotive semiconductor market is projected to achieve a 41.1 per cent increase, the highest growth of all major chip markets, iSuppli added.

The second-fastest growing segment is set to be the data processing semiconductor market, which expanded by 36.7 per cent largely because of the rise in DRAM sales.

Chip sales to the Americas is expected to see the largest growth of all regions, with an expansion of 38.4 per cent. The Asia-Pacific region will drop to second place with 37.6 per cent growth, with Japan and EMEA following.

The semiconductor industry was expected to rebound following the deep drop of 2009, but the actual growth outstripped all expectations, said Dale Ford, senior vice president, market intelligence services for iSuppli.

“The enormous expansion in semiconductor revenue was based on renewed demand for electronic equipment, such as computers, televisions and cell phones. However, semiconductor sales in 2010 are set to rise at more than three times the rate of electronics equipment revenue,” he said.

“This augmented growth is being driven by a range of multiplying factors, including inventory rebuilding, upward price pressure due to a supply/demand imbalance and an increase in the average semiconductor content of major electronic products.”

Growth in electronics revenue is expected to continue in 2011, with iSuppli projecting a five per cent annual increase.