Strange, the article opens with "Global semiconductor sales are expected to increase by 6.9 percent in 2013" and closes with "Semiconductor demand will remain weak for 2013." So no matter what happens, IDC's forecast will be correct.
@Frank- Opps. Your comment caught my attention and I realized that we left off a very important word. What she said was PC semiconductor demand would remain weak in 2013. Here is the full quote:
PC semiconductor demand will remain weak for 2013 as the market continues to be affected by the worldwide macroeconomic environment and the encroachment of tablets," said Nina Turner, Research Manager for semiconductors at IDC.
Tom, probably the PC market will decline faster now with tablet becoming more popular. But the reason could be the shelf life of the smartphone which will be sold this year will impact the sales in next year as not everyone will be willing to shell out money on new smartphone.
Tablets and PCs both use chips. The PC market is declining, but not as fast as the tablet market is growing. So, I'm guessing the net effect is that demand for chips is growing on that level.
Phones? They sell more each year, so chip demand should continue to rise smartly for the foreseeable future.
And let's throw in data centers. They're growing fast and, while some servers can now handle more data than they used to, the rise of big-data is forcing the addition of many new DCs. So that market is growing faster and faster.
None of those seem to explain why IDC expects half the growth next year that is sees this year?
Aside from an economic downturn, what other factors would account for that?
We all know that the PC market is in declined and will likely never return to the peak levels it experienced a couple years ago. But with tablets and smartphones booming, the net impact of the PC's decline on the semiconductor industry shouldn't be very dramatic. IDC forecasts that chip revenue from the computing segment will grow 2 percent this year, but predicts that chip sales to the consumer segment (including tablets) will be up 15 percent. Not bad.
2013 is pretty much in line with other market research firms. Their 2014 projection appears somewhat lower than some others. A CAGR of 4.2% until 2017 sounds optimistic. The semiconductor industry experienced cyclical ups and downs. When can we expect the next down?
GoGoGeek: I totally agree on all scores. If they're so optimistic about this year, why are they less enthusiastic about next year? An economic downturn is the only think that seems to explain it to me. To answer your question, I guess they see that coming later this year -- if indeed that's the cause.
Any other ideas out there on why chip sales would fall in half next year?
I agree with you Tom. IDC gave no specific reason for predicting that growth will slow considerably next year. You'd have to chalk it up to macroeconomic uncertainty. IDC clearly believes that inventories levels have come into balance with demand, setting the stage for a big second half of this year. But there is no specific reason stated for that not carrying through into next year.
I think the semiconductor industry has to be happy with a 7% rebound, if indeed that turns out to be the case. I worry it may be too optimistic becaue it assumes some pretty healthy growth in the second half. We know the chip makers could use it badly. As for the next down, it's hard to tell. It's not like the old days with the really big volatile swings, is it?
Hi Dylan - the latest Cowan LRA Model's global semiconductor sales growth forecasts for 2013 and 2014 came in at 4.0 percent and 5.7 percent, respectively. These results are derived from May's sales numbers as posted by WSTS in their monthly (May 2013) HBR which I shared with you back at the beginning of July. These sales growth results correspond to yearly sales forecasts of $303.2 billion and $320.6 billion for 2013 and 2014, respectively. The details behind these forecast estimates as gleamed from the model can be found at the following URL = http://electronics.wesrch.com/paper-details/docx-EL1SE1J5AVTLZ-updated-global-semiconductor-sales-for-2013-and-2014-per-the-cowan-lra-forecasting-model. These two results are obviously less bullish (for 2013) and more bullish (for 2014) than IDC's sales growth forecasts of 6.9 percent and 2.9 percent.
Mike Cowan, independent semiconductor industry market watcher and developer of the Cowan LRA Model for forecastiung global semiconductor sales.
Hi Dylan (again) - in your third paragraph there were two additional yr-over-yr sales contractions post 2001; namely in 2008 (-2.8 percent) and 2009 (-9.0 percent). However, it should be noted that 2001's sales contraction was quite large, namely down 32.0 percent.
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