Optimism for 2010 chip market

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17 February 2010 News

According to Databeans, this year will be a much rosier prospect than last year was for the global semiconductor chip market, with low inventory levels in the channel setting the stage for a strong recovery.

And a good start for the decade will provide increasing opportunities for the electronics industry, from a host of new applications, to higher electronics content within the existing products consumers have come to rely upon daily. Year 2010 revenue is expected to reach $257 billion, a 15% increase from 2009, when the market was valued at $224 billion.

All segments are expected to experience growth, even automotive and industrial, with revenue climbing up to 12% and 8% respectively in those areas. Wireless markets will experience the highest growth rates, with a 19% overall increase from $48 billion to $57 billion this year. The consumer segment is also expected to outperform, with an increase of 17% for this year.

While some in the market remain cautious, due to other indications that are signalling moderate recovery at best for the overall economy, the momentum coming into the first quarter is not expected to dissolve, due to overstocking or even shortages, which would price products out of reach for consumers. Databeans’ view is that the supply channel is not expected to exceed end-demand, because the industry has done a great job in getting better reads on how much to build. Lessons learned back in 2001 were evident, as the industry abruptly responded in the last quarter of 2008 and first quarter of 2009. So while there may be specific product markets that will need some adjusting, the industry should not experience any significant price inflation, or ‘over-ordering,’ combined with returns.

From a product perspective Databeans expects the strongest growth in revenue from Flash memory, followed by DRAM and LEDs. Other integrated circuits and discrete components will balance out the growth, with average rates ranging from 9% up to 13% for the year.

For more information visit www.databeans.net

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