Revenue for chipmakers could reach $310 billion this year, helping the industry reach a record in sales growth, according to a report released Tuesday by iSuppli.
Stronger prices and ongoing demand for smartphones and flat-panel TVs will be the two driving forces behind the surge in sales, iSuppli said. The record revenue would represent a gain of 35 percent from 2009, better than expected and higher than iSuppli's May forecast of 31 percent growth.
"The semiconductor market already was in for beefy growth in 2010 because of strong consumer demand for electronic products," Dale Ford, senior vice president for iSuppli, said in a statement. "However, it's now apparent that semiconductor sales are getting an infusion of growth hormone in 2010 because of a number of factors, including rising prices, inventory buildups, and richer chip content in key electronic products like smartphones and advanced LCD-TVs. All this is causing chip revenue to bulge to awesome dimensions this year."
Taking home $80.7 billion more in sales over last year, the industry will see its largest expansion in history in terms of dollars and cents. As a comparison, revenue for chipmakers rose by slightly less than $60 billion during 2000, the next best year for dollar chip growth, according to the report.
The market for DRAM is expected to skyrocket by 86 percent, while growth for NAND chips used in phones, cameras, and MP3 players, will rise by one third, iSuppli said. After hitting $76.4 billion in the second quarter, chips sales should reach $81.5 million in the third quarter followed by $81.8 billion in the fourth.
The Semiconductor Trade Association is also eyeing a bright year for its member companies. On Monday, the group reported global chip sales for the second quarter of $74.8 billion, up 7.1 percent from the first quarter's $69.9 billion. Revenue for the first half of the year reached $144.6 billion, 50 percent higher than for the same period last year.
The SIA attributed the robust sales growth to strong demand from key markets as well as the effects of the industry's slowdown in the first half of 2009. The group cautions that growth may moderate over the next few months and that factors such as consumer confidence, job growth, and economic growth will need to be monitored. But it's still projecting overall annual gains of 28.4 percent for 2010.