Sales of semiconductors worldwide fell in 2009, which was expected given the global recession, according to the Semiconductor Industry Association. However, the drop was not as bad as predicted, and the SIA says that increasing demand for PCs, cell phones and consumer electronics, as well as growth in China and India and a host of new devices such as netbooks and tablets, will continue to fuel a stronger 2010.
The global semiconductor market, like most of the tech industry, struggled
through a difficult 2009, but it is showing signs of recovery.
According to the SIA (Semiconductor Industry Association), global sales of
semiconductors during the year fell 9 percent, to $226.3 billion, over 2008,
when sales were $248.6 billion.
However, the SIA had predicted sales for 2009 to be at $219.7 billion. In
addition, December sales were $22.4 billion, an increase of 29 percent from the
same month in 2008.
The numbers, released Feb. 1, indicate that 2009 did not turn out to be as
bad as predicted, and set the stage for stronger growth in 2010, according to
SIA President George Scalise.
"2009 turned out to be a better year for the global semiconductor industry
than expected," Scalise said in a statement. "A strong focus on inventories
throughout the supply chain mitigated the impact of the worldwide economic
downturn and positioned the industry for growth as the global economy
Fourth-quarter sales were driven in large part by growing demand for such
devices as PCs, cell phones and other consumer electronics. PCs and cell phones
accounted for about 60 percent of the semiconductors sold in the quarter, and the
SIA expects sales of those devices to grow to the low to mid-teens in 2010,
which will further boost semiconductor numbers.
Unit sales of consumer electronics will be in the mid-single digits, Scalise
"We are also seeing the effects of recovery in the enterprise sector, and we
believe this trend will continue," he said.
Also driving demand are the emerging markets of China
where consumers are buying handsets and computers. At the same time, both
regions are investing in wired and wireless infrastructures, which will further
drive demand for semiconductor products. The Asian market was the only one to
see sequential growth from November to December, and saw the largest jump-42.9
percent-in sales in December 2009 over the same month in 2008.
In addition, the growth of such new-and relatively inexpensive-devices as
netbooks and tablets are broadening the markets for semiconductor products,
"With improving consumer confidence and signs of economic recovery around
the world, the semiconductor industry is well-positioned for growth in 2010,"
Scalise isn't the only one who sees an increasingly strong semiconductor
In a research note issued Feb. 1, Broadpoint AmTech analyst Doug Freedman
said the semiconductor space is well-positioned for a recovery, despite what
other analysts have said about the marketing peaking.
"The industry is targeting sustained profitability, not unreasonable growth
forecasts," Freedman said in his note, supporting his decision to upgrade the
sector for investors.
He said Wall Street financial analysts underestimated the demand for
electronic devises during the recession-hobbled 2009, and that there are both
short-term and longer-term issues that will continue to drive demand.
In the short term, Freedman pointed to the Chinese New Year-in
mid-February-as a catalyst for driving consumer demand for electronic devices.
In the longer term, technologies such as touch-enabled devices,
server-supported applications, virtualization and computing mobility will help
drive demand, he said.