IDC cuts forecast for chip market growth

PanARMENIAN.Net - IDC has cut its forecast for 2012 chip market growth to less than 1% from the 4.6% estimated previously. The market research firm also revised downward its projection for 2013 to 4.9% growth, compared to a larger 6.2% rise, according to DigiTimes.

Semiconductor revenues worldwide will reach US$304 billion in 2012, and US$319 billion in 2013, according to IDC. The firm in July forecast that revenues for 2012 and 2013 would climb to US$315 billion and US$335 billion, respectively. IDC also downwardly revised its CAGR projection for the chip market from 2011 to 2016 to 4.1% from 4.8%.

Weakness in PC demand, DRAM and overall memory price deterioration, and semiconductor inventory rationalization, coupled with continued global macroeconomic uncertainty from lower global GDP growth, a slowdown in China, the Eurozone debt crisis and recession, Japan's recession, and ongoing fear of fiscal cliff negotiations' impact on IT spending by corporations have all been levers affecting global semiconductor demand in 2012, according to IDC. Bright spots for the market include smartphones, tablets, set-top boxes and automotive electronics, which IDC expects will continue to be key drivers of growth over the coming years.

IDC expects semiconductor inventories to come into balance with demand in the second quarter of 2013, with growth to resume in the second half of 2013.

Semiconductor revenues for the consumer segment will register growth of 9.8% in 2013, while those for the computing industry segment will increase by a mere 1.7%, IDC said. Meanwhile, semiconductor revenues for the communications segment will grow 6.5% in 2013 with revenues for 4G phones to enjoy a 140.1% jump.

Regionally, Japan and Europe continue to be the two weakest regions, IDC indicated. Although GDP growth has slowed in China, India, and Brazil, demand for smartphones, tablets, and automotive electronics remains strong. In the US, 4G phones, mobile consumer devices (tablets and e-readers), network infrastructure, and set-top box deployments will drive a healthy semiconductor growth cycle over the next five years, IDC said.