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Novellus CEO: Old growth drivers push IC recovery

Posted: 05 Apr 2010 ?? ?Print Version ?Bookmark and Share

Keywords:IC growth driver? semiconductor industry? PC market? fab tool?

Novellus Systems Inc.'s top executive finds that the semiconductor industry is set for a new and healthy three-to-four year growth cycle, driven by many of the same dynamics from the 1990s. Rick Hill, chairman, president and CEO of Novellus, said there is an uncanny parallel between the IC growth drivers in the mid-1990s and today.

As a result, Hill said, the IC industry is set for a major recoveryand expansionfollowing the horrific downturn in 2009. According to Hill, the IC industry is set to grow 13 to 15 percent in 2010, while the semiconductor equipment market is expected to increase by a whopping 80 percent this year.

The semiconductor and fab tool markets are already off to a strong start in 2010, but many wonder if the demand will continue in 2H 10. "We are bullish that is not a one or two quarter phenomenon," Hill told EE Times. "We think the underlying demand from end customers is really driving the expansion of the semiconductor industry today. It's probably going to last three or four years. From the standpoint of a semiconductor expansion, I think the upturn will last three or four years at least."

During a presentation at the company's headquarters here, Hill made reference to forecasts from market research firm Gartner Inc. Gartner does not see a downturn in semiconductors until 2014.

After declining 9.6 percent in 2009, global semiconductor revenue is expected to rise 19.9 percent in 2010, reaching $276 billion, according to Gartner. The firm expects the semiconductor industry to show continued growth through its forecast period in 2014. The market is on track to surpass the $300 billion mark in 2012 when the market is forecast to total $304 billion.

Worldwide semiconductor capital equipment spending is projected to surpass $29.4 billion in 2010, a 76.1 percent increase from 2009 spending of $16.7 billion, according to Gartner.

During a recent conference, Semico Research raised its IC forecast. The IC market is expected to jump 24 percent in 2010 and grow by another 11.5 percent in 2011, according to the firm. Semiconductor revenue slipped to $223 billion in 2009, a 10.2 percent decrease compared to 2008.

Market research firm IC Insights Inc. recently increased its estimate for 2010 semiconductor growth, saying it now expects chip revenue to increase 27 percent this year, reaching $253 billion.

IC Insights said it expects semiconductor revenue to increase another 15 percent in 2011, reaching $290 billion. Worldwide chip revenue of $253 billion would be the most ever in a single year, eclipsing the previous high-water mark of $234 billion, set in 2007.

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