SIA sees consistent growth for sector, however, Gartner analyst warns US recession could damage prospects

Mixed opinions about semiconductor market

The Semiconductor Industry Association has released figures that show an annual growth rate of the semiconductor market of 7.7 per cent until 2010.

It said that consumers appetite for consumer electronics was likely to see demand for semiconductors continue to rise till the end of the decade.

"Consumer purchases continued to drive industry growth in 2007 despite rising energy costs and other concerns," said SIA president Gary Scalise. "Unit sales of personal computers, cell phone handsets, MP3 players, and digital televisions were very robust in 2007."

It also predicted that sales of PCs, which it singled out as the largest marketing for microchips, are expected to have grown by 11-12 per cent this year.

However, market research firm, Gartner has warned that its figures show that the semiconductor market could be in for a rough ride on throughout 2008 and into 2009.

It warned that if the US economy stumbles in 2008, the result would be a collapse in semiconductor sales as US consumers tighten their belts. "We’re looking at a 30% chance of the U.S. going into a recession," said Gartner analyst Dean Freeman.

"Thirty percent is a fairly good probability‚ĶIf we go into a recession, then U.S. consumers will spend a lot less. And since a lot of what we spend on is electronics, we’ll see less growth in the overall semiconductor industry next year."

He also stated that an economic recession in the US would likely affect worldwide economies and further impact sales, exacerbating potential losses.

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