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    IDC: Semiconductor Market Growth Muted by Global Economic Concerns

    By
    Jeff Burt
    -
    July 19, 2012
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      Microsoft€™s release later this year of its Windows 8 operating system, along with continued strong demand for smartphones and tablets and the rebound from flooding in Thailand last year that strangled hard-disk drive inventories, are fueling growth in the global semiconductor industry, according to analysts at market research firm IDC.

      However, offsetting some of those positive signs are continued uncertainties in the global economy, including the financial crisis around the Eurozone and slowing growth in crucial emerging markets like China and Brazil, the IDC analysts said in a July 19 report about the semiconductor industry.

      IDC is forecasting that worldwide semiconductor revenue will grow to $315 billion in 2012, a 4.6 percent increase from 2011, and that growth will be steady into 2016. Next year, IDC forecasts revenue will come in at $335 billion, or a hike of 6.2 percent, and grow 4.8 percent a year between 2011 and 2016, when revenue will hit $380 billion.

      There are a number of positive trends in the semiconductor industry, according to Mali Venkatesan, research manager for semiconductors at IDC.

      “As we forecasted earlier this year, the cyclical semiconductor downturn that started in the middle of last year reached bottom in the second quarter of 2012,” Venkatesan said in a statement. “Supply constraints on semiconductor products, such as smartphone applications processors and PC discrete graphics processors based on the most advanced process technologies, are easing as foundries are bringing more capacity online. Also, the semiconductor industry has recovered from the flooding in Thailand that held back the supply of hard drives and PCs.€

      In addition, Intel continues to ramp up its 22-nanometer manufacturing capabilities as it churns out its Ivy Bridge processors, while foundries and memory companies are preparing for the move to 20nm processes. All these factors point to strong growth in the semiconductor market, Venkatesan said. However, that growth will be muted, at least in the short term, by the ongoing global economic issues.

      Helping to fuel that growth is strong demand for smartphones, tablets and automotive electronics, according to IDC. The numbers bear that out. In a report in June, IDC analysts upped their expectations for sales of tablets this year, from 106.1 million units to 107.4 million. At the same time, they increased the forecast for 2013€”from 137.4 million to 142.8 million units, adding that the number will grow to 222.1 million units by 2016. Dropping prices and the release of Windows 8 are helping drive the upward trend this year, the analysts said.

      According to ABI Research, in the first three months of the year, smartphone shipments grew 41 percent over the same time in 2011, to 144.6 million units. In addition, ABI analysts said earlier this month that the percentage of cars with connected car computer systems will grow from 11.4 percent this year to 60.1 percent in 2017.

      IDC analysts said they expect the stronger semiconductor numbers in the second half will spill over into 2013, thanks to Windows 8 in tablets, increased enterprise IT spending, next-generation tablets, smartphones and gaming consoles and an expected improvement in the global economy.

      Jeff Burt
      Jeffrey Burt has been with eWEEK since 2000, covering an array of areas that includes servers, networking, PCs, processors, converged infrastructure, unified communications and the Internet of things.

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