Quarter One of 2011 is well underway. Many forecasts in 2010 expected more constrained growth in 2011 for processor companies, after a robust rebound in 2010. Many of these processor companies posted strong growth in their embedded segments, with several companies having growth near 30%.
So, how is Q1 beginning to shape up for these companies? VIA Technologies has posted solid growth from January to February of 2011, with combined sales of $25.7 million versus $23.8 million during the same period in 2010, for a CAGR of 7.9% (based on an exchange rate of 29.74 New Taiwan Dollars to one US Dollar). VIA will likely see continued growth with the release of new products like their VIA Eden X2 which was just unveiled at Embedded World 2011. This dual-core processor engages several of the current trends including reduced power consumption, multimedia focus, and data encryption. The growth that VIA has displayed so far exceeds the worldwide semiconductor growth predicted by the Worldwide Semiconductor Trade Statistics (WSTS) of 4.5% for 2011 (http://www.wsts.org/PRESS/Recent-News-Release).
By comparison, WSTS reported the worldwide semiconductor growth in 2010 as 32.7%. While the majority of companies have yet to release financial data for the first quarter, if VIA Technologies is any indication, 2011 is off to a bright start. Meanwhile, on the boards and systems side, NEXCOM has posted net sales of $202,591 thousand New Taiwan dollars. This is a decrease of 15.9% month-over-month relative to December 2010, but a marked growth year-over-year of 75% from January 2010. This suggests the boards and systems market may be off to sound growth as well.
VDC believes growth during 2011 will be increasingly driven by the Asia Pacific region, especially China. While the manufacture of semiconductors has been focused in Asia for some time, the region is now becoming a major consuming market as well. The International Monetary Fund (IMF) projects that China’s GDP will grow at 9.6% in 2011, while the United States’ GDP will grow at a mere 3.0% (http://www.imf.org/external/pubs/ft/weo/2011/update/01/). Companies that have strong sales forces in China and other Asia Pacific countries should see substantial gains over the next year relative to companies more focused on countries in the West.