SUNNYVALE, Calif. – The semiconductor industry should have a good 2017 as long as political wild cards around the globe stay neutral or positive. Growth could hit 5 percent, led by DRAMs and flash as well as 32-bit microcontrollers, analog and automotive.
That was the view from Bill McClean’s annual Silicon Valley talk here. The president of market watcher IC Insights doesn’t believe the big plans cooking in China or the Trump administration will substantially impact the industry this year, but rising populism in Europe could dampen growth.
“We think this is a milestone year,” with IC sales of $314.1 billion, cracking the $300 billion mark for the first time, McClean said. He estimated the next milestone at $400+ billion in 2023, a long period of 4 to 5 percent compound growth.
“Memory will really drive growth this year,” with 10 percent growth and upside potential after dragging it down for the last two years, he said. With DRAM and flash the largest and third-largest revenue segments in ICs, “they carry a lot of weight and they are volatile, they can swing the total market 3-5 percent,” he said.
Application-specific analog parts in automotive and 32-bit MCUs could will outgrow memory at 11 and 12 percent, respectively. And the mixed-bag category of optoelectronics, sensors and discretes will outgrow ICs overall.
Given $201.8 billion in semiconductor M&A deals over the past two years, “more value is going into the top 10-25 companies, and we see this trend going forward in next few years,” McClean said.
Nvidia was the fastest growing chip maker last year at 35 percent, moving up two points to the 15th largest semiconductor company, excluding foundries. China’s SMIC and Israel’s TowerJazz were close behind at 31 and 30 percent, respectively.
Among large companies that did well, Mediatek, Toshiba (now up for sale) and TSMC had good years, growing 20, 14 and 11 percent, respectively. SK Hynix and Marvell both dropped 14 percent and Mitsubishi did the worst, falling 17 percent.
Both Qualcomm and NXP had bad years, falling 7 and 10 percent. However, their proposed combination will make them the third largest chip vendor behind Intel and Samsung—the only major change among the top 10. With growth of 15 percent, HiSilicon, the chip design arm of China’s Huawei nudged into the top 20.
Next page: Light political winds in the forecast
DRAMs lead in value, analog in units.