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IDC Cuts Global Semiconductor Revenue Outlook


Market research firm International Data Corp. on Wednesday cut its global semiconductor revenue outlook for this year and the next, saying continued global macroeconomic uncertainty, soft PC demand, DRAM and overall memory price deterioration, and semiconductor inventory rationalization hurt chip demand this year.

In its year-end 2012 update, IDC said it now expects 2012 worldwide semiconductor revenues to grow less than 1% and reach $304 billion. In July, IDC forecast worldwide semiconductor revenues to grow 4.6% to $315 billion in 2012.

For 2013, IDC now forecasts worldwide semiconductor revenues to rise 4.9% to $319 billion. Previously, it estimated 2013 worldwide semiconductor revenues to rise 6.2% to $335 billion.

IDC expects global semiconductor revenues to log a compound annual growth rate of 4.1% from 2011-2016, reaching $368 billion in 2016, compared to its prior expectations of $380 billion.

Bright spots for the semiconductor 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 said it expects semiconductor inventories to come into balance with demand in the second quarter of next year, with growth to resume in the second half of 2013.

"We expect lower, but positive global GDP growth in 2013. Semiconductors for smartphones will see healthy revenue growth as appetite for data, multimedia processing, and multitasking will drive high-end smartphone demand in developed countries while an ongoing transition to 3G networks will accelerate smartphone adoption in developing regions. PC demand will continue to remain in a period of transition next year until more technology and design innovation begin to change the course of demand," said Mali Venkatesan, research manager for Semiconductors at IDC.

Japan and Europe continue to be the two weakest regions. Demand for smartphones, tablets, and automotive electronics remains strong in China, India, and Brazil despite slow GDP growth in those countries, IDC said.

The research firm noted that 4G phones, mobile consumer devices such as tablets and e-readers, network infrastructure and set-top box deployments will drive a healthy semiconductor growth cycle in the U.S. over the next five years.

by RTTNews Staff Writer

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