Despite challenges posed by the Japan earthquake and tsunami, the semiconductor market continues to grow, according to analysts from IHS iSuppli and Gartner. Both firms warned that the uncertain economy will play a role in how the rest of the year shakes out, however.

The worldwide semiconductor market is set to continue its strong growth through the rest of 2011, due in large part to the skyrocketing demand for mobile devices like tablets and smartphones, according to market research firms IHS iSuppli and Gartner.

That growth will come despite the devastating earthquake and tsunami in Japan in March that threatened to cripple semiconductor supply chains, the two firms said in separate reports June 21.

"Thanks to the hardiness of the global electronics supply chain, the semiconductor industry is set for a year of solid growth in 2011," Dale Ford, senior vice president for semiconductor market intelligence at HIS iSuppli, said in a statement. "Neither the Japan quake disaster nor weak economic conditions will derail the market's expansion. In fact, demand has been so strong for semiconductors in hot consumer items such as tablets and smartphones that IHS has raised its forecast slightly to accommodate the improved outlook."

Gartner's outlook was a bit more muted. In the first quarter, the firm projected revenue growth of 6.2 percent for 2011. However, Gartner analysts are now calling for 5.1 percent growth. While the situation in Japan didn't have as great an impact on the supply chain as feared, there will be some ripple effects throughout the year, according to Gartner analyst Peter Middleton.

"The disaster in Japan clearly had an impact on the semiconductor market, and supply chain behavior, but it is less than initially feared," Middleton said in a statement. "In response, in the last two weeks of March, vendors stepped up efforts to secure supply in the face of uncertainty and potential shortfalls — leading to some double ordering, which continued into the second quarter. We think vendors were cautious with their second-quarter guidance, and we expect the majority will exceed those estimates."

There will be some impact in the third quarter as vendors and suppliers get a better feel for the longer-term effects of the earthquake and tsunami, he said.

"Friction in the supply chain may impact some production and some surprises may occur," Middleton said. "However, once third-quarter trends are established, and supply chain participants are satisfied that all issues are understood and production is normalized, we expect an effort to draw down inventory, which will weaken the semiconductor market in late 2011 and early 2012."

Overall, IHS iSuppli expects the market to expand 7.2 percent, with revenue growing to $325.9 billion, up from $304.1 billion in 2010. That's up slightly from the firm's projection in April of 7 percent growth. Gartner is predicting revenues of $315 billion in 2011, up from $299 billion last year.

Both firms point to soaring demand for mobile devices — tablets, smarpthones, e-readers, handheld video games, and solid state drives — as the key drivers behind the growth in the semiconductor market. Given that, the wireless communications segment will be the fastest growing part of the semiconductor space, according to IHS iSuppli.

Gartner agreed, with the analysts saying that through 2013, two-thirds of the revenue growth in the semiconductor industry will come from tablets and smartphones.

"One critical trend is the introduction of new generations of high-performance mobile application processors, which form the heart of both smartphones and media tablets," Jon Erensen, research director at Gartner, said in a statement. "These high-end processors, combined with higher amounts of DRAM and NAND flash memory, will enable the performance and storage required for advanced new applications, including context-aware computing, augmented reality and computational photography."

Mobile PCs also will continue to see strong growth, despite the threat of tablets such as Apple's iPad and the host of challengers, including Research In Motion's BlackBerry Playbook, Motorlola's Xoom, and Samsung's Galaxy Pad, according to IHS iSuppli.

However, IHS iSuppli's Ford warned that the uncertain economy could play a role in how the rest of the year shakes out.

"Many exciting and innovative products will entice consumers to spend and support increases in electronics demand for 2011, driving continued semiconductor growth," he said. "However, a key consideration will be whether the economy can maintain sufficient stability to support consumer confidence and spending."

Unless something unforeseen happens, Ford said, he expects the semiconductor market to continue its steady climb. After it grows 7.2 percent this year, the market will moderate to 4.8 percent and 4 percent in 2012 and 2013, before picking up speed again, reaching 8 percent growth in 2014 and 7.5 percent the following year. Revenues should hit $411.8 billion by 2015, according to IHS iSuppli.

Jeffrey Burt is a writer for eWEEK.

This article was originally published on LinuxDevices.com and has been donated to the open source community by QuinStreet Inc. Please visit LinuxToday.com for up-to-date news and articles about Linux and open source.