Sales targets provided by key chip suppliers indicate that the market will growth 6 percent sequentially in the third quarter, another relatively weak seasonal performance, IHS said. Subdued expansions for the key third and fourth quarters indicate the semiconductor market will not generate sufficient growth to prevent the market from contracting for the year, according to IHS.
IHS said PCs and related peripherals are the key market segment pulling down the overall chip market in 2012. The previous IHS iSuppli forecast predicted that the expansion of the wireless communications sector would be big enough to propel growth for the chip market this year. But the downward pressure created by the worsening deceleration of the PC semiconductor market is now expected to outweigh the mid single-digit growth in semiconductor demand forecast expected for wireless communications and the smaller industrial electronics segment, according to IHS.
Ford shipments of new products such as as Ultrabooks and other ultrathin PC platforms in the second half of the year would give the PC market a much needed boost, but not enough to offset the counterweight of growing economic worries limiting consumer spending.
IHS now expects broad-based revenue decline in 2012 across most semiconductor component categories.
IHS is still forecasting a strong rebound of more than 9 percent growth in 2013, based on expectations of improving economic conditions. But multiple high-impact factors still present the risk of a strong downturn in the economy in 2013, which would also pull down the electronics and semiconductor industries, according to IHS. These factors include the Eurozone crisis, significantly slower growth in China, the potential federal tax and budget "fiscal cliff" in the U.S. and turmoil in the Middle East, according to IHS.