SAN FRANCISCO — Market watchers are once again increasing their forecasts for 2017 semiconductor sales growth, as the red hot memory chip market shows no signs of cooling.
Both market research firm Gartner and independent semiconductor industry analyst Mike Cowan are now predicting that chip sales will top the $400 billion mark for the first time in 2017. Gartner is forecasting that chip sales will reach $411 billion this year, a 19.7 percent increase from last year, while Cowan's forecast calls for sales to rise 18.9 percent to reach $403 billion.
Price increases for memory chips, particularly DRAM and NAND flash, continue to set the pace. Gartner is now projecting that memory chip sales will rise 57 percent this year.
"A shortage of memory, and in particular DRAM, is driving semiconductor revenue higher," said Jon Erensen, a research director at Gartner, in a press statement. "Strength is spreading to other semiconductor categories as well with non-optical sensors, analog, discretes and image sensors all forecast to grow over 10 percent in 2017."
Forecasters, including the World Semiconductor Trade Statistics (WSTS) organization, were already expecting the semiconductor industry to post its highest growth rate since the recession recovery year of 2010. But they have been compelled to revise market forecasts upward multiple times as the memory capacity shortage and other factors continue to push sales to new highs.
In August, sales topped the $35 billion mark for the first time, according to WSTS. Sales are now expected to top $400 billion for the first time this year after eclipsing $300 billion in 2010 and $200 billion in 2000.
Gartner expects chip sales to rise an additional 4 percent to reach $427.4 billion in 2018. The firm forecasts that the market will decline by 1 percent in 2019 as the memory market turns with leading vendors adding new supply.
Cowan's outlook for 2018 is slightly lower. He expects sales to increase by $13 billion, 3 percent next year, to reach $416 billion next year.
— Dylan McGrath is editor in chief of EE Times.