Inventory corrections expected in the third-quarter of the year, due to ‘friction in the supply chain’ as a result of ‘residual effects’ from Japan and its supply constraints have led to Gartner lowering its semiconductor forecast for 2011. Worldwide semiconductor revenue is projected to total US$315 billion in 2011, a 5.1% increase from 2010 revenue of US$299 billion. However, this is down from Gartner's previous projection in the first quarter for a 6.2% growth year.
"The disaster in Japan clearly had an impact on the semiconductor market, and supply chain behavior, but it is less than initially feared," said Peter Middleton, principal research analyst at Gartner. "In response, in the last two weeks of March, vendors stepped up efforts to secure supply in the face of uncertainty and potential shortfalls — leading to some double ordering which continued into the second quarter. We think vendors were cautious with their second quarter guidance, and we expect the majority will exceed those estimates."
"Although the impact is less than feared, we are anticipating some residual effects in the third quarter of 2011 as friction in the supply chain may impact some production and some surprises may occur," Middleton said. "However, once third-quarter trends are established and supply chain participants are satisfied that all issues are understood and production is normalized, we expect an effort to draw down inventory, which will weaken the semiconductor market in late 2011 and early 2012."
Gartner forecasts worldwide application-specific standard product (ASSP) revenue to reach US$79.7 billion in 2011 and grow to US$99.4 billion by the end of 2015.
The highest overall growth through 2015 is coming from nonoptical sensors, used in automotive applications. However, growth is also coming from increased sensor use in applications outside automotive, especially smart phones, tablets and video game hardware, according to Gartner.
"One critical trend is the introduction of new generations of high-performance mobile application processors, which form the heart of both smartphones and media tablets," said Jon Erensen, research director at Gartner. "These high-end processors, combined with higher amounts of DRAM and NAND flash memory, will enable the performance and storage required for advanced new applications, including context-aware computing, augmented reality and computational photography."