Chip sales to hit $400B in '11, report says

The semiconductor market will top a dizzying $400 billion in 2011, according to a recent report by IC Insights. From now till then, the annual growth will stay just the right side of respectable, maintaining double-digit average increases of 10.1 percent.

Along the way, the research firm believes the $300 billion mile marker will be reached in 2008, eight years after the industry passed $200 billion. The $100 billion marker came in 1994. Since 1990, when sales first tipped $50 billion, and stuff like the iPod was only a gadget geek's dream, the semiconductor industry has clocked compound annual growth of 10.4 percent. This year, semiconductor sales will reach $247 billion, a 9 percent increase over 2005.

Even though annual growth will slow a bit, the amount spent on equipment will remain steady. IC Insights thinks spending on chip gear will exceed $80 billion in 2011, which means capital spending as a percentage of semiconductor sales would be similar to the 2006 ratio of 21 percent, the report said.

IC Insights said $53 billion will be spent this year on equipment, a 14 percent increase over 2005. The record remains $60 billion, set in the dotcom heyday of 2000.

- Mike Clendenin
EE Times