Intel Continues to Lead Struggling Semiconductor Market: Gartner
Economic uncertainty and slow PC sales are keeping revenues low heading into 2013, but analysts see a rebound later next year and heading into 2014.The contraction in the PC market and the uncertain global economy are continuing to conspire to drive down revenue in the worldwide semiconductor market, according to analysts at Gartner. According to numbers released Dec. 17 by the research firm, revenues in the semiconductor space were $298 billion in 2012, a 3 percent drop from the $307 billion generated last year. The 2012 numbers were less than what the analysts expected earlier this year, when Gartner projected that slow growth in the first half of 2012 would give way to improvements in the second half and a recovery in 2013. However, orders were lower than normal in the third quarter, and projections for the fourth quarter also call for declines. The PC market showed some of the sharpest declines, though even the smartphone segment—which was still driving revenue—is not immune to outside issues, according to Steve Ohr, research director at Gartner. "Uncertainty about the state of the macroeconomy, coupled with ongoing inventory overhang, sent ripples through the semiconductor industry," Ohr said in a statement. "The hardest-hit areas include the PC supply chain, memory, analog and discrete components. The PC business, ordinarily a growth driver, was on a negative slope for the first time in many years. PC production declined 2.5 percent in 2012. Even the smartphone juggernaut had begun to show signs of maturing, though it remained the strongest driver for revenue growth in 2012."
PC sales worldwide have been slowing for more than a year, due in large part to the troubled global economy and the growing adoption of mobile computing devices, in particular smartphones and tablets. Both Gartner and IDC found that revenues in the space declined between 8 and 9 percent in the third quarter, and tech vendors tied to the PC industry—including chip makers Intel and Advanced Micro Devices, and OEMs like Dell and Hewlett-Packard—are taking a financial hit while trying to rapidly expand into new growth areas and reduce their reliance on PCs.