Tablet And e-Reader Boost For Semiconductor Sales

The semiconductor market continued to grow in May, thanks in large part to the growing popularity of mobile devices, according to the Semiconductor Industry Association (SIA).

The SIA’s figures, released on July 5, are also the latest indication that the impact of the earthquake and tsunami in Japan in March on the tech industry may be less than initially feared.

The SIA said in its report that global sales of semiconductors in May hit $25 billion (£16bn), a 1.8 percent increase over April and a 1.3 percent jump over the same month in 2010, numbers that reflect not only the lighter impact of the Japanese disasters but also such trends as greater demand for electronics and the expansion of computer processors into a wide range of products.

Steady Growth In Hard Times

The growth, though steady and modest, was encouraging, according to SIA President Brian Toohey.

“Global demand for high-end electronics, the continuing proliferation of semiconductor technology into a wider range of products, growth in emerging economies and better than expected recovery from the Japan earthquake will be continued drivers of industry growth in 2011,” Toohey said in a statement.

Consumer demand for such devices as tablets and e-readers continues to grow. In addition, industrial processors for such renewable energy devices such as solar panels and e-meters and for vehicles also are driving demand, according to the SIA.

Looking forward, struggling economies in the United States and elsewhere could impact the semiconductor industry, the analysts said, noting that emerging markets like China and India will play a significant role in future growth.

SIA’s report reflects similar announcements from market research firms Gartner and IHS iSupply, which both said June 21 that demand for tablets and smartphones were key growth drivers in the market. They also said that the growth was coming in spite of any impact the natural disasters in Japan were having.

“Thanks to the hardiness of the global electronics supply chain, the semiconductor industry is set for a year of solid growth in 2011,” Dale Ford, senior vice president for semiconductor market intelligence at IHS iSuppli, said in a statement when this firm’s report came out. “Neither the Japan quake disaster nor weak economic conditions will derail the market’s expansion. In fact, demand has been so strong for semiconductors in hot consumer items such as tablets and smart phones that IHS has raised its forecast slightly to accommodate the improved outlook.”

However, Gartner analyst Peter Middleton said the issues in Japan would have a ripple effect throughout the year.

“The disaster in Japan clearly had an impact on the semiconductor market, and supply chain behaviour, but it is less than initially feared,” Middleton said in a June 21 statement. “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.”