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Global IC market forecast for 2015 cut by 1%

Posted: 28 Oct 2015 ?? ?Print Version ?Bookmark and Share

Keywords:IC Insights? IC market? DRAM?

IC Insights has revealed a report that examined the effects of slowing global GDP growth and a stronger U.S. dollar on the IC market forecast for this year. Since all of IC Insights' figures are presented in U.S. dollars, a strengthening U.S. currency deflates foreign sales and market results while a weakening U.S. dollar serves to inflate the sales and market figures.

The rare occurrence of significant strengthening of the U.S. dollar versus most of the major currencies this year is expected to deflate the 2015 worldwide IC market growth rate by at least 3 full percentage points. This deflation presents itself in the form of lower IC average selling prices (ASPs), which is forecast to register a steep 5 per cent decline this year when reported in U.S. dollars.

The beginning of this year started out very strong with the January 2015/2014 IC market showing YoY growth of more than 10 per cent. In total, the 1Q15 IC market ended up 6.5 per cent higher than the 1Q14 worldwide IC market.

The 2Q15 began by registering similar monthly YoY IC market growth that was displayed in 1Q15, with the combined 2015 April and May IC markets up 5.6 per cent compared to the combined April and May IC markets in 2014. However, things began to change in June as the IC market ended up 3.1 per cent lower than the June 2014 IC market. Unfortunately, the 2015 July and August worldwide IC markets followed the disappointing YoY trend that began in June.

It should be noted that the average H2 versus H1 of the year growth rate in the IC market since 1990 is 9.2 per cent. However, IC Insights is forecasting that the 2H15 IC market will be down 1 per cent as compared to 1H15. If this occurs, it would be only the fifth time since 1990 that the H2 of the year IC market was worse than H1 (the other years being 1996, 2001, 2008 and 2011). This weak H2 market has resulted in IC Insights lowering its full-year 2015 IC market forecast from 1 per cent to negative 1 per cent.

Worldwide monthly IC market

The table compares the worldwide monthly IC market figures from January through August of 2015 and 2014.

Looking ahead to 2016, three reasons lead IC Insights to believe that the worldwide IC market will register mid-single digit growth next year: 1) The current excess IC inventory is forecast to be under control by early next year; 2) Worldwide GDP growth in 2016 is expected to show some improvement as compared to 2015; and 3) The U.S. dollar is unlikely to show nearly as much strength against the major foreign currencies next year as it did this year.

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