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Chip sales going up claims Gartner

by on13 December 2012

Up 4.5 per cent

Next year worldwide semiconductor revenue is projected to total $311 billion in 2013. This represents a 4.5 percent improvement from 2012 and could be a sign that the industry is turning around.

According to Gartner economic headwinds and an inventory correction have blighted fourth quarter projections from the previous quarter's forecast of $330 billion. Analysts have also reduced growth predictions for 2012 with semiconductor revenue expected to total $298 billion, down three percent from 2011. Gartner's third quarter forecast had put revenue at $309 billion for 2012, which would have meant an increase of 0.6 percent from 2011.

Although things are improving Peter Middleton, principal analyst at Gartner said that there are all sorts of problems which will happen in 2013. He lists the looming fiscal cliff, ongoing European debt crisis, slower emerging market growth and regional tensions.

Inventory levels were already high at the start of the second half of 2012, and as PC demand rolled off, supply simply overshot demand. The semiconductor market was further depressed when DRAM prices failed to rebound in 2012. Gartner predicts that the DRAM market will not recover until the second half of 2013, when lower supply growth is expected to pull the market into a period of undersupply. This should prove a turning point for the semiconductor industry; memory is expected to lead the recovery with 15.3 percent growth and total semiconductor revenue is projected to reach $342 billion in 2014, an increase of 9.9 percent from 2013.

PC production is expected to decline 2.5 percent in 2012. In 2013, total PC production is expected to remain weak but might be saved by the move to ultramobile PCs. The challenging economic environment has contributed to PC life cycle extension, in addition to users extending the life of their PCs as they adopt tablets. Mobile phone production growth in 2012 and 2013 is predicted to soften overall as the tough economy reduces short-term demand for phones.

However, the forecast for utility/basic smartphones has been increased, largely at the expense of traditional phones. In particular, adoption of Android-based entry-level smartphones in emerging regions continues to accelerate and will be a key growth driver. Worldwide smartphone unit production growth in 2013 is forecast to be 33 percent.

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