IDC: Global semicon revenue hits $301B in 2011

Industry withstood adversities such as natural disasters in Thailand and Japan to grow 3.7 percent last year due to robust demand for devices such as smartphones and tablets, new report states.
Written by Liau Yun Qing, Contributor

Worldwide semiconductor revenue increased by 3.7 percent year-on-year to reach US$301 billion in 2011, and is expected to grow another 6 to 7 percent this year, reports IDC.

In a report issued on Monday, the research firm noted that the industry had to weather the macroeconomic uncertainties in the United States and Europe, the earthquake and tsunami in Japan, China's slowdown in the second half of 2011, and floods in Thailand, but emerged stronger for it.

Its growth came on the back of demand for device applications, such as smartphones, media tablets and e-readers, automotive infotainment, notebooks, datacenter servers, and wireless and wired communication infrastructure, the report added.

However, revenues for the computing segment decreased year-over-year due to the DRAM price collapse. DRAM revenue dropped more than 25 percent due to a supply glut and falling average selling price (ASPs). For instance, pureplay DRAM vendor Elpida Memory saw its revenue decline by 40 percent in 2011, which ultimately led to its bankruptcy earlier this year, IDC stated.

In terms of ongoing industry trends, Mali Venkatesan, research manager of semiconductors at IDC, noted that semicon vendors are turning to more integration as they try to position themselves for the next phase of growth, and as device applications become more intelligent and move toward supporting high-level operating systems, connectivity, and application processing capabilities.

As such, mergers and acquisitions (M&A) will be a key theme in 2012 as large companies with strong cash balance vie for competitive positions, he said. This is a continuation of 2011, in which a number of M&A took place, notably including Qualcomm's purchase of Atheros, and Texas Instruments's acquisition of National Semiconductor, the analyst pointed out.

The semicon industry is also expected to "bottom out" in the second quarter of this year, following which fab utilization rates will pick up and accelerate in the second half of this year. "Overall, IDC expects 2012 semiconductor revenue growth to be in the 6-7 percent range," Venkatesan stated.

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