Gartner forecasts decline in global semiconductor market

According to the market intelligence firm, the global semiconductor market will decline by 0.9% in 2016.

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Gartner forecasts decline in global semiconductor market Smartphones and video game consoles have contributed to the stabilisation of electronic equipment market.
By  Alexander Sophoclis Pieri Published  October 24, 2016

According to market intelligence firm Gartner, the global semiconductor market's revenue is forecasted to decrease by 0.9% from 2015, to a total of $332b.

The figures represents two consecutive years that the market's revenue has declined. Despite the decline figure however, the overall outlook for semiconductors does show some positive improvements.

"The worst appears to be over, with a stronger outlook for the remainder of 2016 driven by inventory replenishment and increasing average selling prices (ASPs) in select markets," said Jon Erensen, research director at Gartner.

"Improving conditions in the commodity memory market contributed the most to the improved outlook based on stronger supply-and-demand dynamics.

"After an inventory correction started the year off slowly, the ramp up to the iPhone 7 launch and the build for the upcoming holiday season has spurred on the market in the second half of 2016. However, in many cases the inventory correction was too steep, and the industry is experiencing shortages and is scrambling to increase supply," he added.

Gartner highlighted the stabilisation of the electronic equipment markets, which is credited for contributing to the positive outlook for the market. This is particularly the case for certain consumer electronics including smartphones and video game consoles.

The company's positive outlook for semiconductors has also factored in the impact of Internet-of-Things and wearable electronics, though these verticals remain in early stages of development and unlikely to directly impact overall revenue growth over 2016 and 2017.

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