SIA predicts slower 2011 for chips after record 2010

Chip industry revenue will grow nearly 33 percent this year to record US$300.5 billion

The Semiconductor Industry Association on Thursday predicted 2010 will be a year of record high chip industry revenue, but that growth will slow next year.

The SIA, an industry association representing U.S. chip makers, said chip revenue will rise 32.8 percent this year to US$300.5 billion [B], the first time it has breached the $300 billion mark.

"We experienced record sales this year due to strong global demand across a broad range of end markets," said SIA President Brian Toohey, in a statement. "We expect more moderate growth through 2012 as the economy recovers and consumer confidence restores."

Demand for PCs, mobile phones, and new devices including the iPad boosted chips in 2010. A global recovery after the sharp downturn last year also helped, as chip makers produced more chips to refill global inventories.

Next year, however, chip makers will face slower growth. The SIA predicts chip industry revenue will rise around 6 percent next year to $318.7 billion, far slower than the 32.8 percent clip this year.

The industry association's forecast for 2011 is close to that of Taiwan Semiconductor Manufacturing (TSMC) Chairman Morris Chang. During an investors conference last week, he predicted global chip revenue growth of 5 percent next year. TSMC is the world's largest contract chip manufacturer.

IDC holds out higher hopes for next year due to increased corporate purchases of information technology goods, including new PCs with Microsoft's Windows 7 OS as well as storage, networking and security gear.

The market researcher in mid-October said global chip revenue will likely rise 8 percent to 9 percent year-on-year in 2011.

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Dan Nystedt

IDG News Service
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