IHS iSuppli reckons the semiconductor market will grow 2.9% this year which is a lot better than last week’s Gartner forecast of a flat to negative year.
“Mounting economic weakness is taking its toll on the worldwide electronics and semiconductor industries just as these markets are entering the critical pre-holiday sales season,” says iSuppli’s Dale Ford, “while economic challenges have persisted into 2011, consumer spending could have still sustained a reasonable level of growth in electronics demand if conditions had remained reasonably stable. Unfortunately, the accelerating decline and instability of the economy has reasserted itself as the primary driver of tepid electronics and semiconductor revenue growth in 2011. The continuing impact of a weakened and stagnant economy is expected to continue to drag on the semiconductor market in 2012, limiting revenue growth to 3.4%.”
The September forecast for global GDP is 3% growth and the forecast for advanced economies is 1.4% growth.
Companies are taking “defensive postures and working to reduce inventories and production levels,” says Ford who expects “a low single-digit sequential expansion in semiconductor revenues in the third quarter.”
Major Japanese semiconductor suppliers that were hit hard by revenue declines in the second quarter due to the earthquake/tsunami/nuclear meltdown have returned to production in an impressively short time. The near-term rebound in demand and shipments in the Japanese market and electronics industry is expected to provide a modest second-half boost to the semiconductor market.
However, if there’s another recession this year, HIS expects a flat 2011.
Smartphone and tablet shipments should grow the wireless market by 16.7% in 2011.
PC shipments should producer IC growth in the segment in the low single-digit range.
Industrial electronics applications should also provide IC sales growth.
Semiconductor revenues in wired communications, consumer electronics and automotive electronics are expected to fall in 2011.
NAND flash, image sensors, LEDs and other sensors are expected to achieve strong double-digit growth, while DRAM revenues are set to fall by more than 18%.
