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Gartner: Semiconductor Market Will Rise 4 Percent in 2012

Worldwide semiconductor revenue will grow 4 percent to $316 billion in 2012, driven by rising demand for media tablets, smart phones, and PCs, according to researcher Gartner Inc.

"The semiconductor industry is poised for a rebound starting in the second quarter of 2012," said Bryan Lewis, research vice president at Gartner. "The inventory correction is expected to conclude this quarter, as foundry utilization rates are bottoming and the economic outlook is stabilizing."

Stabilizing DRAM prices will help drive sales growth within the industry. Last year, falling DRAM tags were a drag on overall sales growth in the industry as prices fell about 50 percent in 2011. The semiconductor industry posted 1 percent revenue growth in 2011, Gartner reported.

DRAM pricing is expected to improve beginning in the second quarter of 2012, and the DRAM market will grow a modest 0.9 percent after declining 25 percent in 2011, according to Gartner.

NAND flash memory revenue, used in cell phones and media tablets and other applications, will rise 18 percent. Analysts attribute NAND flash growth to a strong increase in mobile consumer devices and solid-state drives.

Media tablet unit production is forecast to increase 78 percent over 2011 and semiconductor revenue from media tablets will reach $9.5 billion in 2012.

PC unit production in 2012 is projected to increase 4.7 percent and semiconductor revenue from PCs will reach $57.8 billion. The PC industry is the biggest driver of semiconductor revenue.

“Emerging markets are driving worldwide PC sales,” said Ranjit Atwal, research director at Gartner. He added that emerging markets will continue to grow for several years and their share of the global unit shipments will rise from 50 percent in 2011 to nearly 70 percent in 2016.

“Emerging markets have very low PC penetration and even with the availability of other devices we still expect a steady uptake of PCs,” Atwal noted.

Mature PC markets will continue to be replacement market driven and their volumes will be much less than their emerging market counterparts.

Mobile phone unit production is expected to grow 6.7 percent, with semiconductor revenue for mobile phones totaling $57.2 billion in 2012.

Lewis said that 2012 should be a “reasonably strong year for the semiconductor industry if the macroeconomic outlook stays in check."

Gartner’s semiconductor forecast was revised from the fourth quarter of 2011 when the researcher reported that the semiconductor market would rise 2.2 percent.

The revised forecast of 4 percent growth assumes the European debt issues stay contained and Iran/Israel tensions stay in check and solid growth from China.