31 Aug Global Semiconductor Revenues Revised Down for 2012
At the start of the year, many semiconductor market analysts predicted the worldwide semiconductor market would grow at a marginal annual rate of around 3 percent in 2012. However, a weak global economy, especially in the U.S., Europe, and China, has led to a downward revision in the forecast. The market intelligence firm IHS iSuppli recently revised its data to reflect a 1.4 percent rate of growth – unchanged from 2011.
For the last several quarters, significant expansion of the wireless segment has boosted the semiconductor industry in the midst of a weak global economy. The “downward pressure” created by declining demand for PC components overshadows any market growth in the wireless segment and other electronics categories, according to Dale Ford IHS iSuppli’s senior director.
Analysts expect the wireless segment for semiconductors to grow about 10.9 percent and earn revenues of $72.6 billion in 2012.
Top Ten Semiconductor Suppliers
The IHS research report reveals each semiconductor supplier in the top ten recorded lower revenues in Q2 compared to the same period last year. Only three companies show positive revenue growth for the second quarter: Broadcom (10%), Intel (3.1%), and Samsung Electronics (5.0%).
Four semiconductor manufacturers, Texas Instrument (-13%), Toshiba (-14.5%), SK Hynix (-11.5%), and STMicroelectronics (-16.4%) all registered double-digit drops in sales revenue.
Regionally, European semiconductor manufacturers experienced the biggest hit in sales revenue with a combined 8.3 percent decline. According to the IHS iSuppli data, two-thirds of European manufacturers led by STMicroelectronics (-16.4%) and Infineon Technologies (-12.9%) reported declines in revenues. Revenues for Japanese semiconductor firms dropped 7.5% compared to the second quarter.
Market Rebound in 2013
The sluggishness of the semiconductor market should dissipate by the end of the year. Market analysts predict a healthy rebound for the semiconductor market in 2013. IHS iSuppli anticipates revenues growing more than nine percent. The future of the semiconductor industry depends on a variety of factors, including the EU debt crisis, Middle-East unrest, and market demand in China. A research report issued by the research firm RNCOS predicts an average growth rate of six percent for the semiconductor market through the year 2015.
Asia-Pacific based semiconductor companies will continue to dominate the global semiconductor manufacturing, particularly China and India. Penetration of markets for tablets and smartphones will continue expanding the wireless segment.
The director and chief of manufacturing at IHS iSuppli Jen Jelinek recommends semiconductor companies focus their R&D budgets on developing products to “ support next-generation wireless applications,” given the growing use of wireless devices.