LONDON -- September sales of semiconductors rose 20% worldwide sequentially to $24 billion in the third quarter.

Research firm Future Horizons not only upped its 2009 forecast to a 10% drop, from an earlier estimate of -14%, but it also said 2010 should blow the doors off previous sales records.

"September's sales were even higher than our optimistic best expectations. This recovery now has a momentum of its own," said Malcolm Penn, chairman and CEO, in a statement.

It was the second straight quarter of sequential growth. Future Horizons forecasts fourth-quarter growth of 5 to 7% and 2009 sales of $220 billion to $225 billion.

"Psychologically this ought to give everyone a shot in the arm but instead there's a strange air of disbelief and denial in the air," said Penn. Future Horizons says the normal dynamics following any market collapse are 1) overreaction, evidenced by excessive cuts in production and inventories; 2) a correction phase to rebalance overdepleted inventories; and 3) a resumption of demand-driven orders.

Phase 1 started in September 2008, and Phase 2 in March. The industry now is clearly in Phase 3 of the recovery, Future Horizons says.

The firm forecasts 2010 growth of 22% year-over-year, to a record $272 billion, followed by additional growth in 2011.

"A 20%-plus growth year will nail the coffin of the 'chip growth is over' merchants of doom, especially when 2011 is likely to be even stronger still," Penn said. "This industry's not changed one iota and market trends are still not based just on rational decisions but emotional ones as well. It is this that creates new market opportunities."

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