Gartner analysts lowered their forecasts in the semiconductor market for both 2011 and 2012, due in large part to slowing PC sales and difficult global economic conditions.
for PCs and other computing devices, driven by larger concerns about the
economy in the United States and abroad, is one of several factors playing into the decision by Gartner analysts to reduce their projections for
the 2011 and 2012 semiconductor markets.
analysts said in a report Sept. 15 that they expect worldwide revenue in the
semiconductor space for the year to come in at about $299 billion, a 0.1
percent decline from 2010. In the second quarter, Gartner had predicted a 5.1
percent increase in revenues for the year.
slowing in demand for PCs is conspiring with high inventory and manufacturing
overcapacity to create an environment where the third quarter-typically a
strong one for the semiconductor industry-could be relatively weak, according
to Bryan Lewis, research vice president at Gartner.
companies' third-quarter guidance is well below seasonal averages," Lewis said
in a statement. "The current guidance by vendors points to flat-to-down
third-quarter growth. Typically, we see guidance for 8 to 9 percent growth in
the third quarter because of back-to-school and the holiday build. The supply
chain is also showing significant slowdown, and semiconductor-related inventory
levels are still elevated."
and other analyst firms
over the past few months have been adjusting
downward their 2011 forecasts for PCs as demand-particularly among
consumers-has continued to slow and concerns about the economies in the United
States and Europe have grown. Gartner analysts said they expect PC production
unit growth to come in about 3.4 percent; in the second quarter, they had
estimated growth would be about 9.5 percent.
production unit growth also has taken a hit, with Gartner lowering its forecast
from 12.9 percent in the second quarter to 11.5 percent this quarter. In
addition, DRAM makers also are suffering from the decline in PC demand-as well
as falling prices-with revenue forecast to decline 26.6 percent. NAND flash and
data processing ASICs are expected to grow about 20 percent, thanks in large
part to the growth in sales of smartphones and Apple's iPad.
Lewis said he expects the problems to spill over into next year. He added,
"2012 is the wild card. We have lowered our 2012 semiconductor forecast
from 8.6 percent to 4.6 percent due to a worsening macroeconomic outlook. However,
the odds of a double-dip U.S. recession continue to rise and are raising fear
that sales prospects will deteriorate further."
analysts earlier this year were talking about healthy growth for the
semiconductor industry, they also cautioned that the global economy could be a
drag on business if it worsened. In July, IDC analysts said that despite such
drivers as new chips from Intel and Advanced Micro Devices, as well as the
continued commercial adoption of Microsoft's Windows 7 OS and growing demand
for smartphones, they were pegging growth in the 2012
to be about 5 percent, in contrast to the 9 percent
increase that was expected in 2011. However, they also said things could
change, particularly if the economic picture darkened.
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," IDC analyst Mali Venkatesan said in a statement at the time. "But
long-term secular growth-driven by end applications such as smartphones, media
tablets, mobile PCs, set-top boxes, LCD TVs, wired networks, industrial
automation and automotive infotainment-remains strong."