Chip industry seeing 'modest' uptick thanks to tablets, phones

Even if tablet sales are suddenly picking up, the semiconductor industry is actually only getting a "modest" boost in revenue, according to a new report.
Written by Rachel King, Contributor

A new report from IHS iSuppli predicts that the overall semiconductor industry will see a "modest" growth rate in 2012 thanks to the proliferation of mobile phones and tablets.

But modest is really an understatement being that analysts only expect an increase of one percent for the year overall from 2011.

Len Jelinek, director and chief analyst of semiconductor manufacturing at IHS, explained in the report that consumers are finally buying that the global economic recovery is real, so that's going to benefit everyone:

The biggest drivers of demand will be consumer-oriented products from the wireless semiconductor segment, such as smartphones and media tablets. The iPhone and iPad from Apple Inc. are perpetual best-sellers in their category, but a swarm of competing products will also help enlarge the total pool of offerings and thus increase sales.

In particular, semiconductor suppliers can anticipate an exceptionally robust third quarter this year in preparation for strong holiday sell-through.

Additionally, while Intel-based Ultrabooks aren't expected to make much of an impact this year, IHS posits that they'll make a major difference in 2013.

The uptick is a bit better when you look at the revenue outlook. IHS analysts predict global semiconductor revenue to topple an approximate $324.6 billion in 2012, up 4.3 percent from $311.4 billion in 2011. That's also better than the 3.3 percent upgrade that was originally predicted in January.

The rising sales of smartphones and tablets are giving boosts to a lot of supply chain partners lately. A study from NPD In-Stat in March found that the mobile processor market is expected to grow at a steady incline over the course of the next four years at a rate of 22 percent each year through 2016.

Furthermore, another report from IHS iSuppli predicted that touch controller integrated circuit shipments will reach 2.4 billion units in 2015, up from 865 million in 2010.


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