The Indian semiconductor industry is expected to make a strong recovery, growing 34.7% in 2010 to $7 billion, market research firm Gartner has said. Growth in the industry dipped to just about 4.5% in 2009 to $5.2 billion from 15-20% of the previous years as the slowdown took hold.

The market this year will be driven by the data processing segment, besides communications. Data processing is expected to generate 35% of overall revenues, up from 31% last year because of increasing local assembly of flat panel monitors, desktops, laptops and smart cards. Laptops could be the biggest growth area, Ganesh Ramamoorthy, principal research analyst at Gartner, told FE. The communications segment can decline from 49% in 2009 to 45% this year because of pricing pressure.

The Indian semiconductor story somewhat mirrors the global turnaround in the industry. Semiconductor revenues globally is forecast to reach $290 billion in 2010, a 27.1% increase from $228 billion in 2009.

Analysts said market conditions have improved across regions and most of the product categories. ?Sequential semiconductor growth has been very strong over the last five quarters, well above seasonal norms, and manufacturing capacity is tight,? said Bryan Lewis, research vice-president at Gartner.

?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,? he added.

Gartner has now raised production forecasts for PCs, mobile phones, automotive and select consumer products. The PC and mobile phone markets will account for about 40% of the global semiconductor market?s growth in 2010. In the PC market, average selling prices (ASPs) of processor are firming up and revenues from it are now expected to grow 15.5%,the firm said.

Gartner said the semiconductor market is on track to cross the $300 billion mark in 2011.