SEA semicon market chips in at No. 3

Southeast Asian semiconductor industry to be world's third-largest this year, due to rising number of wafer fabs and photovoltaic installations in region, predicts global body.
Written by Vivian Yeo, Contributor

The 2010 outlook for the semiconductor industry in Southeast Asia is rosy, underscored by increased investments in wafer fabs and photovoltaics (PV), according to new estimates from global industry body Semi.

In a statement Friday, Semi said the region's materials industry encompassing semiconductors, displays and PV markets will reach US$7.1 billion in 2010, making it the third-largest global market after Japan and North America.

The Southeast Asia semiconductor capital equipment market is also expected to grow 65 percent over 2009 to US$2.3 billion this year, the association added. Last year, the capital equipment market saw a dip of 46 percent year-on-year.

"We believe the region is in economic recovery and positioning itself well for the next growth cycle," said Terry Tsao, president of Semi Taiwan and Southeast Asia. "Traditionally, Southeast Asia is the leading hub for semiconductor final assembly and test. However, recent investments in wafer fabs have transformed the region into a major player in front-end manufacturing as well."

The PV industry is also poised for steady growth during the year. Globally, solar installations will rise by 51 percent, with several new PV manufacturing facilities in Malaysia and Singapore slated to begin production from 2010, Semi said.

The industry body, however warned that the semiconductor industry may not be ready for an anticipated period of long-term sustained growth. It suggested that falling revenues and downsizing over the last year might affect the ability of companies to obtain funding quickly enough to support business expansion, product innovation and human capital investments.

Last month, research analyst Gartner said worldwide semiconductor revenues in 2010 will increase 20 percent over last year, to reach US$276 billion. Demand for DRAM (Dynamic random access memory) will drive semiconductor growth, the analyst firm said.

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