Home > Asia, Asian semiconductor industry, global semiconductor industry, global semiconductor market, SSIA, ST > Global semiconductor market will be $313 billion in 2012: SSIA

Global semiconductor market will be $313 billion in 2012: SSIA

November 17, 2011

A view of SSIA's Summit.

A view of Singapore Semiconductor Industry Association's Summit.

The Singapore Semiconductor Industry Association (SSIA) recently held its 2011 Summit. Estimating the global semiconductor industry in 2012, the SSIA agrees with Future Horizon forecasts stating that 2011-Q3 will be flat (+/- 1 percent), and that 2011-Q4 will show a slight decline (-1/-2 percent) with total year growth of 1 percent as compared with growth of 2010 +32 percent.

Pasquale Pistorio, honorary chairman, ST Microelectronics, who spoke at SSIA’s Summit, described expectations for 2012 as including a low first half, followed growth of +8 percent and 2013 growth of 22 percent. “The industry will reach the elusive $400 billion mark in 2013,” noted Pistorio. The global semiconductor market will be $313 billion in 2012.

Meeting semicon industry challenges
According to the SSIA, the semiconductor industry challenges going forward include:
* Industry growth in an uncertain market: The semiconductor industry is cyclical – and this poses challenges. “Excessive investment in inventory during expansion or economic slowdown, or both, has been the way of life in this industry,” said Pistorio. “The semiconductor industry is characterized by big market swings.  In 2001, the swing was +69 percent. Now is a new swing. This is the first correction of this decade. This is the nature of the industry – this is business as usual.”

* Growth of emerging semiconductor companies: With semiconductor startups declining in number and VCs becoming more and more hesitant to invest funds in getting them off the ground, a different approach is needed to enable these innovative entrepreneurs to gain a foothold in the semiconductor market.

To encourage growth in this sector, SSIA will become involved in a semiconductor-focused company incubator to guide the creation of growth of Singapore- based fabless semiconductor startups; create an SSIA emerging company board with a focus  on better meeting the needs of emerging semiconductor companies and facilitating coordination with established Singapore semiconductor companies; and coordinate with Singapore government agencies and the Economic Development Board on infrastructure support initiatives for emerging semiconductor companies.

Asian semiconductor industry worth $177 billion in 2012
Estimating the Asian semiconductor industry in 2012, the SSIA said that Singapore plays a significant role in the overall. The Asian semiconductor market is expected to be $177 billion in 2012. According to SSIA projections, the 2012 Singapore semiconductor market will be approximately $44.6 billion.

Year 2010 was a record year for Singapore’s electronics industry. The industry attained historic highs in both manufacturing output and value-added. Electronics manufacturing output grew 26.9 percent in 2010 to reach S$89.9 billion, far surpassing the global industry growth of 9.3 percent. The electronics industry was also the largest contributor to Singapore’s 2010 GDP from the manufacturing sector, with its share of GDP increasing to 7 percent from 5.7 percent in 2009.

The strong growth of Singapore’s electronics industry was enabled through industry transformation. Over the years, the electronics industry has transformed to manufacture higher value-added products and R&D. This is illustrated through two main sectors – semiconductors and data storage.

Singapore’s semiconductor industry posted a nominal growth of 49.8 percent, outpacing the global semiconductor industry’s 32.5 percent growth in 2010.  As a result, Singapore’s manufacturing output share of global semiconductor revenues increased from 11.2 percent in 2009 to 13.5 percent in 2010.

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  1. Michael
    November 17, 2011 at 1:49 pm

    Isn’t the rise from $313 billion in 2012 to over $400 billion in 2013 too inflated? It seems the global concerns and issues have not really been addressed while making this prediction.

    • November 17, 2011 at 1:58 pm

      Quite agree! Using the 22 percent growth in 2012, as Pasquale Pistoli has estimated, the $313 billion looks to be achieving $380-$381 billion by 2013. So, it remains to be seen whether the $400 billion mark will ultimately be achieved by 2013!

      Interestingly, the Asian semiconductor market will be $177 billion in 2012, which is well over 50 percent of the global market. That’s good news for Asia! ;)

  2. Hillol Sarkar
    November 17, 2011 at 3:03 pm

    We are talking about adding $100B by 2013. Long run $30T investment is required for infrastructure.

    1. Advanced Economy – Modernize

    2. Outside G8 – Build infrastructure

    Market is in Top Speed – CTO Bell Lab — check out at my.opera.com/amssoc/blog/

  3. Mike Cowan
    November 18, 2011 at 1:00 pm

    Pradeep – I would like to point out that at the time Mr. Pistorio spoke (on Oct 31st), 2011-3Q’s global semiconductor sales was not available – it was published by the WSTS on Nov 2nd. Therefore, the actual 2011-Q3 sales came in at $77.291 billion, which corresponds to a sequential (2Q => 3Q) sales growth of 3.5 percent, which is much stronger than was expected relative to Pistorio’s stated expectation as shown below:

    “Estimating the global semiconductor industry in 2012, the SSIA agrees with Future Horizon forecasts stating that 2011-Q3 will be flat (+/- 1 percent), and that 2011-Q4 will show a slight decline (-1/-2 percent) with total year growth of 1 percent as compared with growth of 2010 +32 percent.”

    Mike C.

    • November 18, 2011 at 1:06 pm

      Thanks a lot, Mike! It all points to an interesting 2012-13 that all of us look forward to.

  4. Mike Cowan
    November 18, 2011 at 4:02 pm

    Hi Pradeep (again) – Another “point-out.”

    According to the latest update to the Cowan LRA Model’s global semiconductor sales forecast numbers (as you posted on your blog back on Nov. 6th), the sales growth expectations for 2011 and 2012 are 3.0 percent and 7.6 percent, respectively. The corresponding sales forecast estimates are $307.3 billion and $330.8 billion for 2011 and 2012 global semiconductor sales, respectively.

    The Cowan LRA Model year-over-year sales growth forecast results are:
    + slightly more bullish for 2011 (namely, 3 percent vs. 1 percent for 2011)
    + and in relatively good agreement for 2012 (namely 7.6 percent vs. 8 percent)

    compared to what Mr. Pistorio shared at the SSIA’s 2011 Summit held at the end of October.
    Mike C

    • November 18, 2011 at 5:21 pm

      Thanks for the update, Mike! :) Perhaps, 2012 and 2013 are going to be ‘very important years’ for the semiconductor industry, God willing.

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