Chip industry to hit record revenue this year

Replacement of office computers and demand for mobile devices such as smartphones and tablets is pushing chip orders up, says SIA

The semiconductor industry will see its total revenues hit record highs of $319 billion this year and $330 billion in 2012 as orders mount for mobile devices such as smartphones and tablet PCs, according to a prediction from an industry group.

The U.S.-based Semiconductor Industry Association (SIA) made the prediction in a report that also noted record high revenues of $298 billion last year, up 24 percent over 2009, which was the year of the global economic crisis.

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Sales of new PCs spurred by the launch of Windows 7 and consumer appetite for mobile devices, namely tablet PCs and smartphones, is helping to accelerate chip demand, said Clark Tseng, a senior research manager at the Taiwan office of the Semiconductor Equipment and Materials International (SEMI) industry association.

Spurred by the success of Apple's iPad and interest from consumers, computer makers are targeting the tablet market with dozens of devices.

Market research firm Gartner forecasts shipments of 54.8 million media tablets this year, up 181 percent over 2010.

"Last year was definitely a rebound, and this year is still strong, especially for mobile devices," Tseng said. "Even after the Japan earthquake, though there's been a bottleneck, the demand is still there."

The powerful March 11 earthquake in northeast Japan has threatened supplies of raw wafer to chip makers as well as materials for other parts of the global tech industry.

Another factor behind the rising revenues is an across-the-board increase in chip quality, which brings higher prices to manufacturers, Tseng said.

The SIA predicted in November that chip industry revenue would go up just 6 percent this year

SEMI, which is based in the U.S. and has around 2,000 members, distributed the SIA report this week as part of a presentation for members.

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