SAN FRANCISCO—Market research firm International Data Corp. (IDC) Thursday (July 19) cut its forecast for 2012 semiconductor market growth, citing macroeconomic uncertainties such as the ongoing Eurozone crisis, lower global GDP growth and slowing in emerging markets.
IDC's reduced forecast for the chip market in 2012 remains near the high end of market research firms covering the market. Forecasts for chip growth this year range from roughly flat to a high of 8.6 percent, with most market watchers expecting growth of 2 to 5 percent in 2012.
In 2013, IDC said it expects chip sales to grow 6.2 percent to $335 billion and increase at a compound annual growth rate of 4.8 percent from 2011 to 2016, reaching $380 billion in 2016.
Despite the ongoing global macroeconomic uncertainties, IDC noted that semiconductor demand remains strong in applications such as smartphones, media tablets and automotive electronics. The firm also noted that the launch of Microsoft's Windows 8 operating system and next-generation smartphones later this year are expected to accelerate chip sales growth in 2013 and beyond.
"As we forecasted earlier this year, the cyclical semiconductor downturn that started in the middle of last year reached bottom in the second quarter of 2012," said Mali Venkatesan, research manager for semiconductors at IDC, in a statement.
Venkatesan said supply constraints on advanced chips such as smartphone and PC discrete graphics processors are easing as foundries bring more capacity online. He added that the semiconductor industry has now recovered from the flooding in Thailand last year, which disrupted the supply of hard drives and PCs.
But Venkatesan said near term growth should be slower than that of past semiconductor cycles due to macroeconomic weakness.
Regionally, IDC said Europe continues to be a weak market for chips across the board. In the U.S., consumer and automotive markets are showing strong semiconductor demand, the firm said. While GDP growth has slowed in China, India and Brazil, demand for smartphones, tablets, and notebooks remains strong, IDC said.
IDC said it expects semiconductor market growth to resume in the fourth quarter of 2012 and into the first quarter of 2013, spurred by the launch of Windows 8 increased enterprise IT spending and next-generation smartphones, tablets, and gaming platforms. The recovery will accelerate into the second half of 2013 and beyond, the firm predicted.