A report by market research firm Gartner suggests that the IT sector will have a higher consolidation rate than any other sector in this fiscal year.
According to the report, this will be because of the recent boost in the contract chip market - recently Globalfoundries announced expansion plans worth $9 billion and rival chip maker Taiwan Semiconductor Manufacturing (TSMC) has also announced a $4.6 billion expansion on their plant.
The report shows that these expansions are due to the forecasted increase in revenue for worldwide semiconductors in 2010 to $ 290billion - a 27.1 per cent hike on last year. Gartner's first quarter 2010 forecast projected worldwide semiconductor sales to grow 19.9 per cent.
Bryan Lewis, research vice president at Gartner, stated (opens in new tab): "Sequential semiconductor growth has been very strong over the last five quarters, well above seasonal norms, and manufacturing capacity is tight."
He went on to say: "Chip revenue growth is clearly outpacing system revenue growth and that is a concern. Gartner's new semiconductor forecast has below-average growth in the second half of 2010 as we are anticipating a minor correction to realign semiconductor sales with electronic system sales. Even with this minor correction, we are still expecting very strong growth and record semiconductor sales in 2010."