Semiconductor growth declines

Semiconductor revenue dropped by 3.6% in Q1 2012; IHS previously forecasted that the expansion witnessed in the wireless communications sector would be sufficient to grow the semiconductor market in 2012

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Semiconductor growth declines Semiconductor revenue dropped by 3.6% in Q1 2012.
By  Clayton Vallabhan Published  September 3, 2012

With the reduced demand for PCs and related components, global semiconductor revenue is expected to decline slightly for the year.

An IHS forecast showed a reduction of about 0.1 percent for the year. This is the first annual decline for the semiconductor industry since 2009.

"The expected decline in 2012 represents a major event for the global semiconductor market," said Dale Ford, senior director at IHS.

"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."

Semiconductor revenue dropped slightly by 3.6 percent in Q1 of 2012 compared to Q4 of 2011. Revenue growth in Q2 amounted to only 3.0 percent compared to Q1. Reduced expansion in these two quarters, show that the semiconductor market will not be able to generate enough growth to stop the market from contracting.

IHS previously forecasted that the expansion witnessed in the wireless communications sector would be sufficient to grow the semiconductor market in 2012, however the lagging PC semiconductor market will nullify this growth.

"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.

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