Semiconductor market continues growth despite economic woes

Peter Dinham
Sunday, 18 December 2011 21:17

IT Industry - Market

Despite continuing global macroeconomic problems, there's a great deal of upside for the semiconductor market, with analysts forecasting growth this year will be in the order of 3.4 percent, bringing in revenues of $296 billion, and with growth in 2012 expected at 3.1 percent with revenues hitting $305 billion.

In its latest market report, IDC says that despite the global economic problems, semiconductor inventory overbuild early this year, and current DRAM oversupply, it expects the 3.4 and 3.1 percent growth figures to be reached, respectively, for this year and next. However, IDC says it does expect the semiconductor market to bottom by the second quarter of next year and growth to resume for the market and accelerate in the second half of 2012.

According to Mali Venkatesan, research manager, semiconductors at IDC, the enterprise spending cycle should continue in 2012, and the launch of Windows 8 for tablets and ultrabooks will drive demand for computing platforms. 'Smartphone penetration will accelerate with the growth of lower-cost devices in emerging markets. Datacentre and storage will also continue to grow in order to support cloud-based applications and data traffic will drive more investments in networking and computing infrastructure. Double-digit growth is also expected for consumer devices such as media tablets and eReaders. Finally, the automotive area will bottom sooner than most markets and have a healthy cycle of growth for semiconductor suppliers. Recovery will continue into 2013 and beyond, leading to a compound annual growth rate (CAGR) of 4.8% over the 2011-2016 forecast period for semiconductor revenues."

Other key findings from IDC's semiconductor application forecaster include:

'¢    Semiconductor revenues for the computing industry segment, which represents about 37% of all semiconductor revenues, will log YoY (2012) and CAGR (2011-2016) growth rates of 0.8% and 4.2%, respectively. Within that, semiconductor revenues for mobile PCs will register YoY (2012) and CAGR (2011-2016) growth rates of 6.2% and 11.4%.

'¢    Semiconductor revenues for the communications industry segment will grow 5.5% in 2012 with a CAGR (2011-2016) of 5.2%. Semiconductor revenues for 4G phones will show YoY (2012) and CAGR (2011-2016) growth rates of 400% and 98%, respectively.

'¢    Media tablets, e-Readers, HD receivers, and LED/LCD TV sets, will see strong demand 2012 as they did in 2011. Traditional devices such as DVD players, DVD recorders, and fixed game consoles will continue to see unit sales erosion. Overall, semiconductor revenues for the consumer industry segment will record YoY (2012) and CAGR (2010-2016) growth rates of 3.6% and 3.7%, respectively.

'¢    Semiconductor revenues for the automotive segment and industrial segment, which includes energy, medical, industrial automation, military and aero, are expected to grow with YoY (2012) and CAGR (2011-2016) of 3.4% and 6.7%, respectively.

'¢    Among semiconductor devices, ASSP revenues for media/audio/graphics will show a CAGR (2011-2016) of 9.2%; but DRAM revenues will decline due to continued pricing pressure with a CAGR (2011-2016) of 1.7%, after a -16% decline in 2012.

'¢    Regionally, Asia/Pacific continues to grow its share of semiconductor revenues, reaching 42% in 2016.