Gartner: Chip revenue to rise 20% in 2010

Gartner (Stamford, Conn.) initially said late last year it expected semiconductor revenue growth of about 13 percent for 2010.

Other market research firms have forecast roughly similar chip growth in 2010. Semico Research Corp. most recently said it expects the sector to grow 22 percent in 2010, while IC Insights Inc. offered a "conservative" forecast of 15 percent growth, saying it could go over 20 percent.

Bryan Lewis, research vice president at Gartner, said that despite last year's annual decline, sequential revenue growth was strong through the last three quarters of the year. "After the gloom early in the year, PC unit production growth actually turned out to be positive in 2009 and is expected to grow close to 20 percent in 2010, fueling strength in semiconductors," Lewis said, through a statement.

But Gartner said a minor correction in chip sales is needed to rebalance chip sales with system sales. The company projects that chips sales growth will ease in the second half of this year. The firm's forecast shows chip growth flattening out in the fourth quarter.

PCs and memory will be the primary drivers for semiconductor revenue growth in 2010, Gartner said. "Rising DRAM prices coupled with strong PC demand will lead to over 55 percent DRAM revenue growth in 2010, making DRAM the fastest growing device type by far," Lewis said.

Gartner said its analysts expect the semiconductor industry to show continued growth through 2014. The market is on track to surpass the $300 billion mark in 2012, when the market is forecast to total $304 billion, the company said.