Chip Revenue To Grow By 20%Chip Revenue To Grow By 20%

Worldwide semiconductor revenue will increase by nearly 20% this year, driven by rising prices and continued growth in PC shipments, a market research firm predicted.

Semiconductor revenue will reach $276 billion this year from $231 billion in 2009, Gartner said in its latest outlook released Wednesday.

"We have seen clear evidence that the semiconductor industry is poised for strong growth in 2010," Gartner researcher Bryan Lewis said in a statement.

The 19.9% increase predicted by Gartner for this year is in stark contrast to the 9.6% year-over-year decline in revenue posted by the semiconductor industry in 2009. Sequentially, however, revenue improved steadily during the last three quarters of last year.

Helping to drive that steady improvement was steady growth in PC shipments, particularly in the second half of 2009. Following a slow start, PC manufacturers managed to ship 5.2% more units in the year, or 294.2 million PCs, than in 2008, according to Gartner.

With PC shipments expected to increase by close to 20% this year, the semiconductor industry is expected to reap the benefits of that growth. "Rising DRAM prices coupled with strong PC demand will lead to over 55% DRAM revenue growth in 2010, making DRAM the fastest growing device type by far," Lewis said.

DRAM, or dynamic random access memory, is the system memory used primarily in PCs and servers.

Gartner predicts continued revenue growth in the semiconductor industry through 2014, with the market on track to surpass $300 billion in 2012.