Tablet computer demand pushes chip market upward, report says

Despite the widespread enthusiasm expressed for tablet computers since their debut about two years ago, analysts continue to underestimate the devices' strength. That was evidenced in a report released by IHS iSuppli, in which the company increases its original prediction for chip industry growth.

The research firm now says worldwide revenue generated by semiconductor sales will reach $324.6 billion in 2012, thanks to the still-growing popularity of tablets and other mobile devices like smartphones. Such growth in the market constitutes a 4.3 percent increase compared to 2011, which is up from the 3.3 percent IHS predicted in a January 2012 report.

“The biggest drivers of demand will be consumer-oriented products from the wireless semiconductor segment, such as smartphones and media tablets," says Len Jelinek, director and chief analyst of semiconductor manufacturing at IHS.

Short of a second economic crisis, the chip market should remain strong moving forward, IHS notes, and is expected to reach $412.8 billion by 2016.

The latest report from Gartner reveals that the semiconductor market showed signs of improvement in 2011 as well. For its final analysis of last year, Gartner says chip revenue reached $306.8 billion for growth of 1.8 percent compared to 2010.