Asia-Pacific semiconductor revenue to grow 6.4%

Consumer electronics and emerging markets such as Vietnam and Thailand are important contributors to the growth of the regional market.

By Suzanne Deffree, Managing Editor, News -- Electronic News, 9/4/2008

Asia-Pacific semiconductor sector revenue will out perform worldwide revenue growth this year reaching almost $160 billion, according to Gartner Inc estimates made this week.

The 2008 Asia-Pacific growth represents a 6.4% increase from 2007 revenue of $150 billion and compares to worldwide revenue growth of 4.6% over the same period. By 2012, semiconductor industry revenue in Asia-Pacific is expected to reach more than $203 billion, Gartner reported.

“Worldwide semiconductor revenue is set for single-digit growth over the next five years, however, selected devices in specific electronic equipment types will post much higher growth,” said John Barber (pictured), research director at Gartner, in a statement. “Home consumer products like Blu-Ray disk, IP-set-top boxes, and home networking equipment will create wide-ranging demand for semiconductors. In addition, mobile products like the Apple iPhone and the Nokia N95 are changing the perception of what a phone is capable of create wide-ranging demand for semiconductors.”

Gartner further reported that the Asia Pacific region continues to increase its dominant share of the world's semiconductor market. However, the research company projected that a slowdown in consumer spending and the threat of rising oil prices will decelerate semiconductor growth over the forecast period.

“Continued growth in China, rapid growth in India, and the emergence of new markets such as Vietnam and Thailand are important contributors to the growth of the regional market,” Phillip Koh, research vice president in Gartner’s Asia Pacific semiconductor group, said in the statement. “These new markets provide excellent business potential for firms in the semiconductor supply chain. In the longer term, Asia-Pacific will continue to attract foreign investment, with low manufacturing costs and huge domestic demand.”

According to Gartner, China's electronics industry will continue to lead growth in the Asia-Pacific, as well as the global semiconductor market. However, the market research company noted that growth in China’s electronics-manufacturing industry slowed in 2006, and Gartner forecasts that it will register slower growth during the five years to 2012.