Semiconductor spend to decline in 2016; Gartner

Spending to decline by $62.8bn due to weak demand and preparation for newer technologies

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Semiconductor spend to decline in 2016; Gartner The aggressive pursuit of semiconductor manufacturing capability by the Chinese government is an issue that cannot be ignored by the semiconductor manufacturing industry
By  Aasha Bodhani Published  May 12, 2016

Worldwide semiconductor capital spending is projected to decline 2% in 2016, to $62.8bn, according to research house Gartner.

David Christensen, senior research analyst at Gartner said: "While the first quarter 2016 forecast has improved from a projected decline of 4.7% in the previous quarter's forecast, the 2% decline in the market for 2016 is still bleak. Excess inventory and weak demand for PCs, tablets, and mobile products continue to plague the semiconductor industry, resulting in a slow growth rate that began in late 2015 and is continuing into 2016."

He added: "The slowdown in the devices market has driven semiconductor producers to be conservative with their capital spending plans. This year, leading semiconductor manufacturers are responding to anticipated weak demand from semiconductors and preparing for new growth in leading-edge technologies in 2017."

The aggressive pursuit of semiconductor manufacturing capability by the Chinese government is an issue that cannot be ignored by the semiconductor manufacturing industry. In the last year, there has been consolidation and merger and acquisition activity with specific offers from various Chinese-based entities, indicating the aggressiveness of the Chinese. This will dramatically affect the competitive landscape of global semiconductor manufacturing in the next few years, as China is now a major market for semiconductor usage and manufacturing.

Looking forward, the market is expected to return to growth in 2017. Increased demand for 10 manometre (nm) and 3D NAND process development in memory and logic/foundry will drive overall spending to grow 4.4 percent in 2017.

This research is produced by Gartner's Semiconductor Manufacturing program. This research program, which is part of the overall semiconductor research group, provides a comprehensive view of the entire semiconductor industry, from manufacturing to device and application market trends.

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