July 7, 2008 – Gartner has slightly raised its forecast for semiconductor sales in the Asia-Pacific region and sub-regions therein, citing stable market conditions despite macroeconomic concerns. And the big regional growth driver isn’t the nation you might expect.
Total semiconductor revenue in the region should increase about 6.4% to nearly $160B this year, with a CAGR through 2012 of about the same (6.3%), Gartner analysts Philip Koh and Chang-Soo Kim note in a research report, pointing to “no signs of a significant slowdown” in major application segments including PCs, cell phones, and other digital consumer electronics products. Look for an overall slowdown in 2011, to a scant <2% growth, they point out.
The main source of sales in the region, China/Hong Kong, will see slowing growth over the period, though it will still dominate nearly two-thirds (61.3%) of the region’s sales, the analysts write. Best growth will be in emerging markets such as India (19.2% CAGR) and “Other” (17.4%).
For India, investments via global EMS firms will drive up semiconductor consumption, the analysts write. And in the “Other” category they particularly call out Vietnam as a hotbed of activity. “This country has become increasingly attractive to global electronic equipment manufacturers and semiconductor vendors, and looks likely to emerge as the next major market in the region’s electronics industry,” they write.
On the way down are other Asia-Pacific stalwarts: S. Korea (-3.3% CAGR), Singapore (-7.6%), and Taiwan (-1.0%). In fact, the Gartner analysts think Singapore sales will drop by >10% in both 2008 and 2011, never regaining positive footing through 2012; Taiwan won’t see positive growth either, and Korea isn’t seen doing any better than breakeven during the period.