Gartner Says Worldwide Semiconductor Revenue to Grow 27 Percent in 2010

Future of the Semiconductor Industry to Be Discussed at Gartner Semiconductor Briefing, June 10, in San Jose, California

STAMFORD, Conn., June 3, 2010 — Worldwide semiconductor revenue in 2010 is forecast to reach $290 billion in 2010, a 27.1 percent increase from 2009 revenue of $228 billion, according to the latest outlook by Gartner, Inc.

The outlook for the semiconductor industry has improved from Gartner's first quarter 2010 forecast, when it projected worldwide semiconductor sales to grow 19.9 percent. Analysts said this improvement in market conditions is in part due to an accelerated broad-based recovery in all regions and most product categories.

"Sequential semiconductor growth has been very strong over the last five quarters, well above seasonal norms, and manufacturing capacity is tight" said Bryan Lewis, research vice president at Gartner. "Chip revenue growth is clearly outpacing system revenue growth and that is a concern. Gartner's new semiconductor forecast has below-average growth in the second half of 2010 as we are anticipating a minor correction to realign semiconductor sales with electronic system sales. Even with this minor correction, we are still expecting very strong growth and record semiconductor sales in 2010."

In this quarter's update, Gartner raised production forecasts for PCs, mobile phones, automotive and select consumer products. The PC and mobile phone markets will account for about 40 percent of the semiconductor market's growth in 2010. In the PC market, processor average selling prices (ASPs) are firming, and 2010 PC processor revenue is now expected to grow 15.5 percent, up from 10.0 percent in the previous update.

Strong PC growth coupled with rising DRAM prices is causing the 2010 DRAM market to surge 78 percent, making it the strongest-performing semiconductor device market. Analysts believe that the demand for media tablets, such as Apple's iPad, will noticeably impact the PC market by 2013, further fueling growth in this category. However, in the near-term, these devices will have a minimal impact on PC and smartphone markets.

Gartner analysts expect 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 2011, when the market is forecast to total $307 billion.

Mr. Lewis will provide more detailed analysis on the outlook for the semiconductor industry during "Gartner Semiconductor Briefing: 2010 Recovery on Track — What About 2011?" The complimentary briefing is taking place June 10 at the Doubletree Hotel San Jose. For more information about this half-day briefing, as well as to register to attend, please visit http://www.gartner.com/it/page.jsp?id=1362228.

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Gartner, Inc. (NYSE: IT) is the world's leading information technology research and advisory company. Gartner deliver the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, Gartner is the indispensable partner to approximately 60,000 clients in 10,000 distinct organizations. Through the resources of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has approximately 4,300 associates, including approximately 1,200 research analysts and consultants serving clients in 80 countries. For more information, visit www.gartner.com.

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