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Chip forecast upped by Gartner

On the rebound after inventory glut

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The market watching wizards at Gartner have taken another gaze in the crystal ball, and after some buffing and polishing have decided that the outlook for the semiconductor industry in 2012 is a bit better than they had expected as 2011 came to a close.

According to the latest forecast, Gartner now expects for global chip sales to stack up to a pile of money $316bn high, up 4 per cent from just over $302bn in sales for all of 2011. If history repeats itself, then this forecast is almost certain to change, and maybe this time for the better, not the worse.

As El Reg previously reported, chips sales were only up nine-tenths of a point last year over 2010's $299.4bn sales. In April 2011 Gartner projected that chip sales would grow by 5.1 per cent to $314bn in 2011, and was also predicting that sales would grow by 8.6 per cent to $341bn.

As 2011 rolled on, Gartner kept on karate-chopping its projections as the PC market was impacted by the disk shortages caused by flooding in Thailand, skittish spending by consumers in the US on new PCs, and across consumers and corporations in Europe in the second half of last year.

"The semiconductor industry is poised for a rebound starting in the second quarter of 2012," explained Bryan Lewis, research vice president at Gartner, in a statement accompanying the semi sales projections. "The inventory correction is expected to conclude this quarter, foundry utilization rates are bottoming, and the economic outlook is stabilizing."

The DRAM memory chip market will stabilize this year, with sales projected to rise nine-tenths of a point after a 50 per cent price decline and a 25 per cent revenue drop last year. Ironically, the bankruptcy of Japanese DRAMurai warrior Elpida last month is going to help memory prices rebound a little, according to Gartner.

Thanks to the fast uptake of solid state drives in the enterprise and its use in various consumer electronics devices, NAND flash memory is going to have a good year, with revenues up 18 per cent in 2012. That's a bit better than the 16.6 per cent growth rate seen in 2011.

Gartner reckons that PC unit shipments will rise by 4.7 per cent in 2012, and that these machines will comprise $57.8bn in chip sales across all the elements packed into their boxes. Tablets will see a 78 per cent increase in unit shipments and drive $9.5bn in global chip sales, with quad-core processors and high-rez screens being the norm. Shipments of cell phones and smartphones will rise by 6.7 per cent and drive $57.2bn in chip revenues.

Yup, the revenues from all the chips in smartphones is collectively going to be about the same as that of PCs. And if you consider a tablet a smartphone without the phone and with a bigger screen, then smartphones are driving more chips than PCs. (El Reg is not suggesting that such thinking is valid, of course. If you call a tail a leg that doesn't mean a dog has five legs, after all . . . . )

Lewis added that the 4 per cent revenue forecast was based on the macroeconomic outlook staying in check, which means the Eurozone debt crisis doesn't get worse or spread, that tensions in the Middle East don't heighten, and China exhibits solid growth. You can probably bet on China. ®

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