The semiconductor market will reach $400 billion in 2011 and will see double-digit average increases of 10.1 percent over the next 5 years, according to new research.

Market research firm InStat announced the prediction on Friday, citing historical the CAGR (Compound Annual Growth Rate) of the worldwide semiconductor industry.

From 1990, when the market first exceeded $50 billion, through 2006, the worldwide semiconductor industry registered a CAGR of 10.4 percent, it said in statement. This historical 16-year CAGR is only slightly higher than [our] 10.1% CAGR forecast for the 2006-2011 time period.

Additionally, the firm believes the amount spent on equipment will remain steady through the period.

To serve the fast-growing semiconductor market, semiconductor vendors must invest significant amounts of capital for new equipment (fabrication, assembly, test, etc.) and facilities, the firm said.

Semiconductor industry capital spending will reach $53 billion in 2006, a 14 percent increase over 2005. The capital spending record of $60 billion, which still stands today, was set back in the boom year of 2000.