SAN FRANCISCO—Market research firm IHS iSuppli Tuesday (Jan. 31) revised its 2012 semiconductor market forecast upward slightly, saying it now expects chip sales to grow 3.3 percent this year to reach $323.2 billion.
Nevertheless, IHS noted that the projected growth for the year is sluggish, citing uncertain global economic prospects and slow moving semiconductor inventory.
But IHS said the overall picture could brighten considerably if the U.S. and the rest of the world recover in 2013. Under such a scenario, growth from 2013 to 2015 would average between a 6.6 and 7.9 percent, with total semiconductor revenue by 2015 rising to some $397.7 billion, IHS said.
IHS' 2012 semiconductor market forecast is generally consistent with that of other market research firms, who for the most part have projected low single-digit growth for 2012. Gartner Inc., for example, is currently predicting 2.2 percent growth for the year, while the World Semiconductor Trade Statistics organization projects 2.6 percent growth.
"Much of the weak performance in both 2011 and this year can be attributed to external circumstances over which the semiconductor industry has no control—the ambiguous state of the global economy, along with assorted troubles in the world’s major markets of the United States, Europe, Japan and China," said Len Jelinek, director and chief analyst of semiconductor manufacturing research at IHS, in a statement. The semiconductor business is coming under pressure because the world economy is not in a strong enough position to drive growth, Jelinek said.
Consumer spending, another key factor for the chip market, lowered the level of inventory of electronic devices and other items incorporating semiconductors during the 2011 holiday season, but not enough re-energize chip demand to replenish stockpiles, IHS said. Chip firms deliberately cut their production run rates in the third quarter of last year, but not enough to bring inventory levels down to levels that would have fired up additional orders and increased factory run rates, the firm said. As a result, semiconductor demand for manufacturers will remain depressed until the second quarter of 2012, according to IHS.
Because factory utilization will not recover until the middle of 2012, IDMs will experience even greater stress to simply maintain the viability of underperforming factories, IHS predicted. Most capital expenditures to boost efficiency within the industry likely will be pushed out to 2013, IHS said.
Memory chips will experience the most hardship once again in 2012, IHS predicted. DRAM sales are expected to decline 16.1 percent this year after dropping 26.8 percent in 2011, the first said. NAND flash will see a less stellar year in 2012 compared to 2011 because of additional capacity coming on to meet a surge of demand for the memory in devices like mobile handsets and media tablets, IHS said.
Wireless communication chips will be a strong market driver this year, spurred by media tablets, smartphones and industrial electronics, IHS said. But for the semiconductor industry to revitalize, it is crucial that the core PC and peripheral markets experience a significant increase in demand, IHS said
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