Question-and-Answer Session
Operator
At this time we will open the floor for questions. (Operator's Instructions) The first question comes from the line of Pranab Sumar with Daiwa Securities.
Pranab Sumar - Daiwa Securities
Thank you for taking my questions. First question is for Dr. Chang. What is your forecast about the global semiconductor industry for 2010? And you indicated a global semiconductor industry recovery might lack (inaudible) recovery, it seems like, from your previous comment. Why is it so defamoral?
Morris Chang
I heard the first question so let me answer that first. I think our current forecast for the 2010 semiconductor market is that it will be up 10% from 2009. And what was the second?
Pranab Sumar - Daiwa Securities
You said that global GDP will reach 2010 in comparison to 2008 level, but semiconductor industry might take a bit longer time sometime in 2010 and '11, somewhere in between. Why does the semiconductor industry lack global GDP in your opinion?
Morris Chang
I think that actually in mind there is a couple of reasons. I think that the first reason is that the world GDP is recovering faster than we anticipated. I think that half a year ago our expectation was that the world GDP would not recover back to the '08 level until '11, and now as I said this evening, we think that next year the world GDP will recover to the '08 level.
The second reason is that I really think that China, a consumption of semiconductors in China, has been very strong and stronger than expected. And of course, the world GDP covers China GDP as well, but the semiconductor in China is proportionately even stronger than the China GDP. So those two are the reason why I think the semiconductor market is recovering faster than we expected at nine months or even six months ago.
Pranab Sumar - Daiwa Securities
Okay, thank you. And my second question is the LED side. You mentioned about the investment of $46 million in the LED business, could you elaborate what type of margin expectation you could expect from this business? Because even the industry leader like Cree, they have a 44% cross margin deficit which is at the highest now, whereas the other chip leaders markets are always below 30%.
Morris Chang
Do we expect any growth on the LED?
Pranab Sumar - Daiwa Securities
Basically, yeah.
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