Semiconductors to See Best Year Since 2010

Dec. 30, 2014
On track to grow more than 9% in 2014, the worldwide semiconductor market is estimated to reach $353 billion, driven by demand for DRAM and LEDs.

Global semiconductor market revenue will expand 9.4% this year, marking the industry’s best performance since its 33% growth in 2010, according to a recent report from industry researcher IHS Technology. The researcher estimates that global revenue will reach $353.2 billion, up from $322.8 billion in 2013. The strong performance follows solid growth of 6.4% in 2013, a decline of more than 2% in 2012, and 1% growth in 2011.

“This is the healthiest the semiconductor business has been in many years, not only in light of the overall growth, but also because of the broad-based nature of the market expansion,” said Dale Ford, vice president and chief analyst at IHS Technology. “While the upswing in 2013 was almost entirely driven by growth in a few specific memory segments, the rise in 2014 is built on a widespread increase in demand for a variety of different types of chips.”

More than half of the industry’s sub-segments will grow by 5% or more this year, Ford explained. This compares to just eight sub-segments experiencing such growth in 2013. When added to the ongoing strong performance of key sub-segments such as dynamic random access memory (DRAM) and light-emitting diodes (LEDs), the result is a stronger overall outlook. DRAM is expected to climb 33% for the second straight year, and LEDs are expected to grow by 11%.

This pervasive growth is delivering general benefits to semiconductor suppliers, with 70 percent of chipmakers expected to enjoy revenue growth this year, up from 53 percent in 2013,” according to IHS.

The report follows positive news from the electronic components supply chain this fall, when manufacturers and distributors met for the annual Executive Conference of the Electronic Components Industry Association. Economists and electronics industry experts gathered for the event forecast a solid outlook for 2015, pointing to industrial markets, wearable electronics, and the Internet of Things as key growth drivers. Ford, who made a presentation at the event, said industrial markets are the strongest opportunity in 2015.

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