Due to unfavourable economic conditions that have resulted to reduced demand for PCs and other electronic components, market research firm, IHS iSuppli has downgraded its global semiconductor market chip revenue forecast for 2012. This is viewed as the first annual decline for the global semiconductor industry since 2009.
As per the results estimated by the IHS iSuppli Application Market Forecast Tool, global semiconductor revenue now is expected to decline slightly for the year, contracting by 0.1 per cent.
"The expected decline in 2012 represents a major event for the global semiconductor market.
Throughout all of 2011, even though electronics markets were very weak, IHS never projected revenue to decline for the entire year. However, the disappointing results in the second quarter and weak third-quarter expectations driven by poor economic conditions are expected to cause the semiconductor market to retreat this year,” said Dale Ford, senior director at IHS.
In the first quarter of 2012, global semiconductor revenue dropped modestly by 3.6 per cent on being compared with the fourth quarter of 2011. Compared to the first quarter, the revenue growth in the second quarter was only about 3 percent. Revenue from different chip suppliers for the third quarter indicates the overall market will grow slightly more than 6 percent sequentially. This indicates weaker performance.
According to IHS, subdued expansions during these two key quarters indicate the semiconductor market will not generate sufficient growth to prevent the market from contracting for the year.
The market segments that had led to the degrowth of the global semiconductor industry are the PCs and related peripherals. IHS said that, the downward pressure created by the worsening deceleration of the PC semiconductor market will outweigh the mid-single-digit growth in semiconductor demand forecast expected for wireless communications and the smaller industrial electronics segment.
"While the introduction and shipment of exciting new products such as ultrabooks and other ultrathin PC platforms in the second half of the year will give the PC market a much needed boost, the counterweight of growing economic worries will place strong downward pressure on the overall PC market and limit both consumer and corporate spending in 2012 ," said Ford.
Most semiconductor component categories are expected to see a decline in 2012 due to this weak performance.
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