New chips from Intel and AMD are helping drive demand for computer semiconductors, but uncertain economic conditions could hurt growth, IDC says.
The worldwide
semiconductor market is seeing a number of growth drivers, including new chips
from Intel and Advanced Micro Devices, continued commercial adoption of
Microsoft's Windows 7 operating system and rising demand for such mobile
devices as smartphones, according to market research firm IDC.
However, there
also are developments that will be a drag on the market over the next few
years, including economic uncertainty in mature markets like the United States
and Europe as well as emerging markets like China, Brazil and India, IDC
analysts said in a report issued July 21.
The result
will be semiconductor revenue growth of 5 percent in 2012, down from the 9
percent increase expected in 2011, they said. IDC is projecting modest revenue
growth in 2011, to $303 billion. Demand for such products as mobile devices and
Internet-connected products will continue to rise, but overall growth will be
challenged, according to IDC analyst Mali Venkatesan.
"IDC also
cautions that continued macroeconomic problems, such as persistent high
unemployment with the associated low consumer sentiment in the U.S., the
ongoing sovereign debt crisis, especially in Europe and the U.S., fear of
recession in the U.S. and Japan in 2012, and fear of high inflation in China,
India and Brazil, will likely impact the semiconductor market negatively in
2012," Venkatesan said in a statement. "But long-term secular growth-driven by
end applications such as smart phones, media tablets, mobile PCs, set-top
boxes, LCD TVs, wired networks, industrial automation and automotive
infotainment-remains strong,"
The computing
segment, which represents about 40 percent of all semiconductor revenues, is
being buoyed by new chips launched this year by Intel and AMD. At the 2011
Consumer Electronics Show in January, both companies launched new architectures
that offer high-level graphics capabilities integrated onto the same piece of
silicon as the CPU, a move designed to increase performance while driving down
power and cooling costs.
During their
respective second-quarter earnings calls this week, executives from both
vendors touted the fast adoption of their new offerings. Intel CEO Paul
Otellini said July 20 that the company's record-breaking revenue in the
second-quarter was due in large part to sales of Intel's new "Sandy Bridge" processors, which he
said saw the fastest ramp of any product in the chip maker's history. This
year, two-thirds of the chips Intel sells will be based on Sandy Bridge, he
said.
For his part,
Thomas Seifert, AMD's CFO and acting CEO, said the rapid sales of the company's initial Fusion APUs (accelerated processing
units) were among the fastest in his company's history. The "Brazos"
processors, for lightweight notebooks and netbooks, are an "unqualified hit,"
he said, selling 3 million units in the first quarter and another 6 million in
the second. He expects a faster ramp of the company's new "Llano" A-Series
chips for mainstream notebooks.
"The success
of the APUs demonstrate that we have the right strategy," he said.
IDC analysts
said the new chips and the continued adoption of Windows 7 by enterprises
should still drive semiconductor demand in the computer segment into 2012.
However, the rise of tablets-which primarily are powered by chips designed by
ARM Holdings and built by Texas Instruments, Qualcomm, Nvidia and others-will
offset some of that demand, they said.
The computing
segment should see about 4 percent growth in 2012 and 5 percent annual growth
between 2010 and 2015, IDC said.
In the
communications industry-which includes telecoms-IDC analysts are calling for 7
percent revenue growth rates for both 2012 and between 2010 and 2015. Demand
for smartphones will continue to be high, while other trends-including cloud
computing, the rapid rise of IP traffic, more smart devices on networks and
migration to next-generation wired networks-also will fuel growth in the
communications segment.
The consumer
segment will see what IDC called "tepid" growth of 5 percent revenue increases,
with continued declining demand for such traditional devices as DVD players and
fixed-game consoles, IDC said.
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