Analyst: IC revenues to top $319B in 2013

According to International Data Corp. (IDC), global semiconductor revenues worldwide experienced less than one per cent growth in 2012 amounting to $304 billion. However, the market research firm added that semiconductor revenues will improve by 4.9 per cent to $319 billion in 2013 and log a CAGR of 4.1 per cent from 2011-2016, reaching $368 billion in 2016.

Weakness in PC demand, DRAM and overall memory price deterioration, and semiconductor inventory rationalisation, coupled with continued global macroeconomic uncertainty from lower global GDP growth, a slowdown in China, the Eurozone debt crisis and recession, Japan's recession, and ongoing fear of fiscal cliff negotiations' impact on IT spending by corporations have all been levers affecting global semiconductor demand last year. Bright spots for the semiconductor market include smartphones, tablets, set-top boxes and automotive electronics, which IDC expects will continue to be key drivers of growth over the coming years.

IDC expects semiconductor inventories to come into balance with demand in 2Q13 with growth to$304 billion resume in 2H13. "We expect lower, but positive global GDP growth in 2013. Semiconductors for smartphones will see healthy revenue growth as appetite for data, multimedia processing and multi-tasking will drive high-end smartphone demand in developed countries while an ongoing transition to 3G networks will accelerate smartphone adoption in developing regions. PC demand will continue to remain in a period of transition next year until more technology and design innovation begin to change the course of demand," said Mali Venkatesan, research manager for semiconductors at IDC.

Regionally, Japan and Europe continue to be the two weakest regions. Although GDP growth has slowed in China, India and Brazil, demand for smartphones, tablets and automotive electronics remains strong. In the U.S., 4G phones, mobile consumer devices (tablets and e-readers), network infrastructure and set-top box deployments will drive a healthy semiconductor growth cycle over the next five years.