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IHS iSuppli Slightly Raises 2011 Chip Forecast

EL SEGUNDO, CA — Showing remarkable resilience in the face of the Japan disaster and uncertain economic conditions, the global semiconductor industry in 2011 is expected to expand by 7.2 percent because of soaring sales of popular consumer products like tablets and smart phones, according to new IHS iSuppli (NYSE: IHS) research.

Global semiconductor revenue in 2011 is projected to amount to $325.9 billion, up from $304.1 billion in 2010, according to a newly revised forecast. The previous IHS iSuppli outlook issued in April predicted revenue would rise by 7 percent for the year.

“Thanks to the hardiness of the global electronics supply chain, the semiconductor industry is set for a year of solid growth in 2011,” said Dale Ford, senior vice president for semiconductor market intelligence at IHS. “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.”

The healthy rise in 2011 comes on the heels of the torrid 32.2 percent increase in 2010 when the market rebounded from the recession-driven downturn of 2009. Following the 7.2 percent increase in 2011, growth will then moderate during the following two years, rising by 4.8 and 4.0 percent, before accelerating to 8.0 percent and 7.5 percent expansions during the next two years. By 2015, semiconductor revenue will reach a milestone when it tops the $400 billion mark and hits $411.8 billion, equating to a compound annual growth rate of 6.3 percent between 2010 and 2015.

The year’s strongest performers in semiconductors, spurred by consumer demand
The strongest semiconductor demand growth in 2011 will be driven by the wireless and mobile segments, led by the proliferation and high demand for devices such as media tablets, smart phones, e-book readers, solid state drives and handheld video game players. Because of this, wireless communications will generate the strongest increase in semiconductor revenue of all chip application markets in 2011, with a 17.6 percent increase.

Despite the popularity of tablets such as Apple Inc.’s iPad, mobile PCs also will be a healthy contributor to semiconductor growth this year. This will help make the data processing category the third-fastest growing semiconductor application market in 2011, with growth of 6.2 percent.

The much smaller industrial electronics segment will be the second-fastest growing semiconductor application market, with revenue rising by 7.3 percent. Sectors achieving slower expansion this year will include consumer electronics at 3.1 percent and automotive electronics at 3.0 percent.

In contrast, semiconductor revenue this year for wired communications is anticipated to contract by 1.7 percent, the only sector to suffer negative growth, IHS iSuppli research shows.

Economic concerns
Although doubts and worries persist on the state of the world economy, the semiconductor industry is performing well against all odds, Ford observed, even on a quarterly basis. For instance, revenue in the first quarter this year declined only 1.4 percent compared to the fourth quarter of 2010. This represented the smallest sequential decrease since 2006 during what is normally the slowest season of the year for chip sales.

Sequential growth is anticipated to return for the rest of the year, with revenue rising by 2.9 percent in the second quarter and by 7.4 percent in the third.

“Many exciting and innovative products will entice consumers to spend and support increases in electronics demand for 2011, driving continued semiconductor growth,” Ford said. “However, a key consideration will be whether the economy can maintain sufficient stability to support consumer confidence and spending.”

Image sensors lead market growth
The fastest-growing semiconductor product segments in 2011 will be image sensors, NAND flash memory, light-emitting diodes, microprocessors, discrete components, sensors and general-purpose analog integrated circuits. Collective revenue from these products is projected to rise by more than 12 percent in 2011, with complementary metal-oxide semiconductor (CMOS) image sensors leading all products with 36 percent growth. IHS iSuppli

3 comments on “IHS iSuppli Slightly Raises 2011 Chip Forecast

  1. Wale Bakare
    June 22, 2011

    The fastest-growing semiconductor product segments in 2011 will be image sensors, NAND flash memory, light-emitting diodes, microprocessors, discrete components, sensors and general-purpose analog integrated circuits

    I strongly agreed with the forecast. In fact, sensor applications are widely being employed as well as wireless sensor networks. Industrial sector is seen as major application area of sensors. I think, its market growth is gradual.

  2. mario8a
    June 23, 2011

    Hi Wale

    which industry you beleive will consume more sensors? Automotive or TVs?

  3. Wale Bakare
    June 24, 2011

    Thanks mario8a. With market development for semiconductor components due to high demand by consumers in electronic gadgets and growing market in security for homes, automotive and others are making contributive market sales to sensor usage. 

    In my opinion, may be in nearest future one will actually be able to provide substantial statistical analysis of an industrial sector that consumes sensors most.

    Nevertheless, the application areas for wireless sensor network for instance:

    1  Facility Management

    2  Environment Control and biodiversity mapping

    3  Health Care Sector

    4  In distribution of goods ie logistic

    5  Agriculture

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