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Wireless Drives Growth in Semiconductor Markets

Semiconductor revenue from wireless communications applications will grow 10.4 percent to $72.6 billion in 2012, compared to $65.8 billion in 2011, according to researcher IHS.

Semiconductor revenue is set to rise by just 0.7 percent in wired communications; 1.3 percent in consumer electronics and by 2.7 percent in automotive electronics. Revenue growth in data processing will be down 1.5 percent and by 17.9 percent in memory multichip packages (MCP), IHS reported.

Because of strong wireless growth, overall global semiconductor revenue this year is expected to rise 3 percent to $320.8 billion, up from $312.2 billion in 2011.

“While most markets are struggling with slow growth or declines in 2012, the wireless segment continues to expand at a healthy pace, driven by strong sales gains for smartphones and media tablets,” said Len Jelinek, director and chief analyst of semiconductor manufacturing at IHS.

He noted that the modest growth forecast for the overall semiconductor market is due to the wireless segment and is not broad-based. As result, semiconductor manufacturers should be cautious about “engaging in any activities that do not support next-generation wireless applications,” Jelinek said.

Semiconductor companies say that the industry appears to have begun the next growth cycle, due in part to encouraging chip demand from the wireless segments, according to the researcher. However, the strength and longevity of the growth cycle will depend on how the global economy performs through the summer.

Although the summer months are not typically the time of year when consumer spending increases for electronics, the season serves as an economic barometer for how consumers will approach their spending during the forthcoming holidays, IHS forecast.