Analyst: IC records to fall in 2010

July 28, 2010 – As if the enthusiastic industry didn’t already know 2010 was a great year here’s more evidence. Global semiconductor sales will increase by a whopping 30% vs. 2009 to $70B (to a total of $310B), the highest year-on-year increase ever, according to IC Insights. That beats the $59B (22%) surge in 2000. And the 30% growth rate in 2010 if fulfilled (and some, including IC Insights’ Bill McClean, think it might be higher) would come in sixth all-time, with 2000’s 37% still on top.

Most of that $72B added to the industry this year will be quickly converted into capital spending, McClean et al predict. 2010 semiconductor industry capital spending will surge 83% to >$47B.

What’s behind the large surge this year, besides being compared to a terrible 2009? It’s not macroeconomic growth — worldwide GDP is expected to be 3.9%, close to its long-term 3.6% trendline. "The real driving force," they say, are the standby chip end-markets: PCs and phones (specifically smartphones). PC unit volumes are expected to grow at least 18% this year to 338M; smartphone unit sales will surge 21% to 275M. And both segments are expected to see at least 10% higher unit volume shipments in 2H10 vs. 1H10 — a return to seasonality, e.g. the traditional back-to-school and holiday build ramps. McClean told SST that he predicts a 7% increase in 3Q10 sequentially, but then a -4% decline in 4Q10 "as the holiday season (at least for ordering ICs) winds down, and a -2% decline in 1Q11 along with the typical seasonal lull. "We believe that the industry will revert to more "normal" patterns during 2011," he said.

Top 10 semiconductor market increases in history. (Source: IC Insights)



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