With just 0.4 percent growth, the chip industry reaches record $299.5B in 2011

The chip industry grew a scant 0.4 percent in 2011, but that was enough to push it to a record $299.5 billion for the year. That wasn’t a bad performance given a weak global economy and disasters in Japan and Thailand.

The Semiconductor Industry Association (SIA), the chip industry’s trade group, said the sales for 2011 compared to $298.3 billion a year earlier. Growth in chips is critical for the economy since semiconductor chips are the backbone of everything electronic.

Worldwide chip sales in December were $23.8 billion, down 5.5 percent from the prior month. Fourth quarter sales were $71.5 billion, down 7.7 percent from the prior quarter and down 5.3 percent from the same period in 2010. All sales numbers represent a 3-month moving average, a statistical smoothing tactic.

“Between the natural disasters in Japan and Thailand and the overall impact of a weak global economy, 2011 presented a number of major challenges for the semiconductor industry. Despite these setbacks the industry showed resiliency and posted year on year growth with record-breaking revenues for 2011,” said Brian Toohey, president of the Semiconductor Industry Association. “The health of the industry is a direct reflection of the pervasiveness of semiconductor innovations and their applications in almost every aspect of modern society.”

The industry saw strong demand in segments such as the optoelectronic, sensor and actuator, and microprocessor markets. All showed solid year over year growth. Lamps and image sensors drove growth in the optoelectronic market to $23.1 billion, up 6.4 percent over 2010. Optoelectronic applications bring energy efficiency and low cost in a wide range of products including mobile devices and cameras.

Sensors and actuators, currently the smallest semiconductor market segment, showed the highest year over year growth at 15.5 percent to $8.0 billion in 2011. Sensors can be used to convert temperature, pressure or acceleration into electrical signals. They are growing in consumer electronics, medical devices and automotive systems. Micro-electro-mechanical systems, or MEMS sensors, are popular for tilt controls in smartphones, tablets and other devices.

Microprocessors, used in PCs and other computing devices, grew 7.5 percent to $65.2 billion in the year, thanks to strong enterprise computing demand. The industry is expected to grow in 2012 as it recovers from the supply chain disruptions related to the flooding in Thailand.

MOS Microprocessors, part of the integrated circuit category, which are predominantly used in PCs and other devices that need processing capabilities also experienced year-over-year growth, with an increase of 7.5 percent in revenue to $65.2B making it the second largest semiconductor market segment for 2011, behind Logic. Strong demand in the enterprise computing segment drove microprocessor sales.

“This year our industry will invest billions in capital expenditures and in R&D, which will pay off both in the short and long term.  In fact, reinvesting a large percentage of revenues is a hallmark of the industry. It’s this combination of R&D investment, top engineering talent, high exports and cutting-edge advances that have made the semiconductor industry a cornerstone of the innovation economy,” said Toohey.

[photo credit: tech digest tv]