Despite challenges posed by the Japan earthquake and tsunami, the semiconductor market continues to grow, according to analysts from IHS iSuppli and Gartner.
semiconductor market is set to continue its strong growth through the rest of
2011, due in large part to the skyrocketing demand for mobile devices like
tablets and smartphones, according to market research firms IHS iSuppli and
will come despite the devastating earthquake and tsunami in Japan
in March that
threatened to cripple semiconductor supply chains, the two firms said in
separate reports June 21.
"Thanks to the
hardiness of the global electronics supply chain, the semiconductor industry is
set for a year of solid growth in 2011," Dale Ford, senior vice president for
semiconductor market intelligence at IHS iSuppli, said in a statement. "Neither
the Japan quake disaster nor weak economic conditions will derail the market's
expansion. In fact, demand has been so strong for semiconductors in hot
consumer items such as tablets and smart phones that IHS has raised its
forecast slightly to accommodate the improved outlook."
outlook was a bit more muted. In the first quarter, the firm projected revenue
growth of 6.2 percent for 2011. However, analysts are now calling for 5.1
percent growth. While the situation in Japan
didn't have as great an impact
on the supply chain as feared, there will be some ripple effects throughout the
year, according to Gartner analyst Peter Middleton.
disaster in Japan clearly had an impact on the semiconductor market, and supply
chain behavior, but it is less than initially feared," Middleton said in a
statement. "In response, in the last two weeks of March, vendors stepped
up efforts to secure supply in the face of uncertainty and potential
shortfalls-leading to some double ordering, which continued into the second
quarter. We think vendors were cautious with their second-quarter guidance, and
we expect the majority will exceed those estimates."
There will be
some impact in the third quarter as vendors and suppliers get a better feel for
the longer-term effects of the earthquake and tsunami, he said.
the supply chain may impact some production, and some surprises may
occur," Middleton said. "However, once third-quarter trends are
established and supply-chain participants are satisfied that all issues are
understood and production is normalized, we expect an effort to draw down
inventory, which will weaken the semiconductor market in late 2011 and early
iSuppli expects the market to expand 7.2 percent, with revenue growing to
$325.9 billion from $304.1 billion in 2010. That's up slightly from the firm's
projection in April of 7 percent growth. Gartner is predicting revenue will
rise to $315 billion in 2011 from $299 billion last year.
Both research firms
point to soaring demand for mobile devices-tablets
, smartphones, e-readers
, handheld video games and SSDs
(solid-state drives)-as the key drivers behind the growth in the semiconductor
market. Given that, the wireless communications segment will be the fastest-growing
part of the semiconductor space, according to IHS iSuppli.
agreed, with the analysts saying that through 2013, two-thirds of the revenue
growth in the semiconductor industry will come from tablets and smartphones.
critical trend is the introduction of new generations of high-performance
mobile application processors, which form the heart of both smartphones and
media tablets," Jon Erensen, research director at Gartner, said in a
statement. "These high-end processors, combined with higher amounts of [dynamic
RAM] and NAND flash memory, will enable the performance and storage required for
advanced new applications, including context-aware computing, augmented reality
and computational photography."
also will continue to see strong growth, despite the threat of tablets such as
Apple's iPad and the host of challengers, including Research In Motion's
BlackBerry Playbook, Motorola's Xoom and Samsung's Galaxy Pad, according to IHS
iSuppli's Ford warned that the uncertain economy could play a role in how the
rest of the year shakes out.
and innovative products will entice consumers to spend and support increases in
electronics demand for 2011, driving continued semiconductor growth," he said.
"However, a key consideration will be whether the economy can maintain
sufficient stability to support consumer confidence and spending."
something unforeseen happens, Ford said he expects the semiconductor market to
continue its steady climb. After it grows 7.2 percent this year, the market
will moderate to 4.8 percent in 2012 and 4 percent in 2013, before picking up
speed again, reaching 8 percent growth in 2014 and 7.5 percent the following
year. Revenue should hit $411.8 billion by 2015, according to IHS