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SINGAPORE : Industry watchers have said semiconductor sales in Asia Pacific are on track to meet this year's global growth forecast of between 27 and 31 per cent. And higher consumer spending will continue to drive the sector forward.
Research firm IDC also projects global semiconductor revenue to hit US$344 billion in 2014, growing at a compounded annual rate of 8.8 per cent over five years - from 2009 to 2014.
Things will get a lot busier for the semiconductor industry if analyst forecasts are anything to go by.
The sector is pushing to hit the record growth rate of 36.7 per cent achieved 10 years ago.
IDC said Asia Pacific continues to grow its share of semiconductor revenues.
Currently, experts said about 60 per cent of the industry's growth are driven by higher consumer spending.
Kevin Tan, investment analyst, OCBC Investment Research, said: "The strong global sales were led by strength in the PC, mobile handset, corporate IT and also industrial applications. PC shipments have grown by 22 per cent in the second quarter, so we see this as a positive impact of the semiconductor industry."
Meanwhile, OCBC has recommended semiconductor counters such as Avi-tech and Micro-Mechanics in Singapore. It added that both companies offer attractive dividend yields of around 6 to 9 per cent for financial year 2011.
OCBC Investment Research also said that the region has done well.
The semiconductor sector in Asia Pacific grew by 5 per cent on-month in May, compared to 1.7 per cent in Europe.
However, experts said growth could moderate in the second half of the year, with Europe and the US seeing more activity.
A V Sridevi, senior research analyst, APAC, Frost & Sullivan, said: "If you look in terms of pent up demand, demand in Asia is not that much as compared to markets such as US and Europe, where the spending has been very low for the past few quarters."
Other downside risks include the European debt crisis, continued high unemployment and low consumer sentiment in the US.
Still, IDC believes device applications like smartphones, mobile PCs and media tablets will show strong growth both in 2010 and 2011. - CNA/ms
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