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ISuppli again raises semiconductor forecast

August 03, 2010 // Dylan McGrath

ISuppli again raises semiconductor forecast

Market research firm iSuppli Corp. again raised its forecast for the semiconductor market this year, saying it now expects revenue for the industry to hit $310.3 billion, up 35 percent from 2009.


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The forecasted $80.7 billion increase compared to last year would be the largest annual increase in dollar terms in the semiconductor industry's history, according to iSuppli (El Segundo, Calif.).

Last week, rival market research firm IC Insights Inc. (Scottsdale, Ariz.) also predicted that chip industry revenue would rise by a record amount in 2010. Last week, market research firm VLSI Research Inc. also raised its forecast for the 2010 chip market, saying it expects the market to increase by 30 percent this year despite looking market uncertainty.

In May, iSuppli predicted that the semiconductor market would growth 31 percent this year.

Dale Ford, senior vice president at iSuppli, said in a statement that the 2010 chip market was already set for strong growth due to consumer demand for electronic products, but that growth is looking better than expected because of several factors, including rising prices and inventory build ups.

"All this is causing chip revenue to bulge to awesome dimensions this year," Ford said.

The forecasted semiconductor revenue growth is based on a strong increase in the sales of electronic equipment, iSuppli said. Factory OEM revenue for electronic equipment is projected to grow by $131 billion to reach $1.54 trillion in 2010, up 9.3 percent from 2009, the firm said.

Following deep cost and inventory cutting efforts in 2009, the semiconductor industry has been pushing to build up stockpiles across the supply chain to support the strong growth in demand for electronics, iSuppli said. This also has enhanced semiconductor growth beyond what end demand would seem to dictate, according to the firm. Historical and projected IC revenue growth. Source: iSuppli Corp.
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