November 18, 2009 / 5:04 AM / in 8 years

Chip execs see China as key growth driver-study

SAN FRANCISCO, Nov 17 (Reuters) - The road to recovery for semiconductors could lead to China.

KPMG, a United States-based audit, tax and advisory firm, said a new survey of semiconductor executives pointed to China as the most important market for revenue growth in the next three years, followed by the U.S. and Taiwan.

“The expectation is that China, as an end user market, will become much more significant,” said the company partner Gary Matuszak, adding that the country is typically a manufacturing economy -- not a bastion of spending.

Additionally, he said, its scores outpaced the United States by nearly two-to-one.

The study has been conducted in collaboration with the Semiconductor Industry Association for the past four years, surveyed 113 senior level executives in the semiconductor industry, including design, foundry and device manufacturers.

Other than growing markets, three-quarters of the semiconductor executives said they expect their revenue to increase by more than five percent in 2010, with more than half of them expecting revenue gains that could exceed 10 percent.

Enthusiasm over job growth was much more muted.

Two-thirds of the survey’s respondents said their workforce would grow by one percent or more in the next year, while only one-quarter of them think growth could exceed five percent.

BREAKING DOWN THE NUMBERS

The study found semiconductor executive’s overall confidence about revenue growth, hiring, capital spending and research and development, as based on a scale the surveyors devised, nearly doubled from the past year, and was exactly the same as in 2007.

Those results were similar to the study’s previous responses, which showed dips in confidence and expected growth in many of those core areas last year as stocks were falling and fears of a prolonged recession began setting in.

“I think it’s positive in that it’s clearly much better than we were last year, and it’s trending in the right way,” KPMG’s Matuszak said. “But I think everyone would say we’re not out of the woods yet.” (Reporting by Ian Sherr; Editing by Anshuman Daga)

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