Gartner: Semiconductor sales to rebound in 2010

Semiconductor sales will likely drop around 11 percent this year to $226 billion, but 2010 will see a projected 13 percent gain to $255 billion, says Gartner.

Global semiconductor sales are now expected to fall this year by 11 percent--an improvement over the previous estimate of a 17 percent drop, according to research released Monday by Gartner. And the outlook for 2010 is sunny.

Revenue is projected to drop this year to $226 billion, an 11.4 percent decline from last year's $255 billion. Next year however, it's expected to bounce back by 13 percent from this year's level, hitting the same $255 billion figure it did in 2008.

Personal computers are the largest factor driving semiconductor sales. In another recent report, Gartner said it expects demand for consumer PCs to continue, which will fuel gains in microprocessors and DRAM (dynamic random access memory) chips. But sales may not jump out of the starting gate.

"Both device types experienced lower revenue declines than the industry average, and DRAM began to be profitable for some vendors in the third quarter of 2009 after almost three years of losses," said Bryan Lewis, research vice president at Gartner, in a statement. "While most of the news has been positive to date, recent channel checks in Taiwan indicate there is concern that PC orders are slowing earlier than the seasonal norm and that 2010 may get off to a slow start."

Besides PCs, cell phones have also been a boon for semiconductor sales, noted Gartner, with their need for NAND flash memory.

"The revenue forecast for the commodity memory market -- DRAM and NAND flash -- has improved because of the stronger demand outlook, which means that pricing has strengthened more than previously forecast," said Lewis. "ASSPs [integrated circuits that perform a specific task] and memory, primarily NAND flash, also benefited from an improved outlook for cell phones."

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