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Negative forecast for global semicon market in 2016

Posted: 06 Apr 2016 ?? ?Print Version ?Bookmark and Share

Keywords:semiconductors? microcomponents? analog ICs? logic ICs?

The latest data from IHS Semiconductors Service" target="_blank">Semiconductors Service reveals that the next three years will be a slow one for the global semiconductor market. This after global semiconductor revenues fell by 2% in 2015.

Sequential quarterly growth was weak throughout every quarter of 2015, especially in the first quarter when the market declined 8.9% over the previous quarterthe deepest sequential quarterly decline since the semiconductor market collapsed in the fourth quarter of 2008 and first quarter of 2009. Global revenues in 2015 totaled $347.3 billion, down from $354.3 billion in 2014, according to global information company Dale Ford, vice president and chief analyst at IHS Technology. "Anemic end-market demand in the major segments of wireless communications, data processing and consumer electronics will hobble semiconductor growth during this time."

Overall semiconductor revenue growth will limp along at roughly 2.1% growth compound annual growth rate (CAGR) between 2015 and 2020, according to the latest information from the HIS Semiconductors Service. Current technology, economic, market and product trends suggest that sometime between 2020 and 2022 new products will come to market that will enable a significant level of growth in semiconductor revenues.

Reshaping the leader board


"Of course the big story for the semiconductor industry was the record level of merger-and-acquisition activity last year," Ford said. "Top players pursued bold, strategic maneuvers to enhance their market position and improve overall revenue growth and profitability."

Intel retained its number one ranking in 2015, after completing its acquisition of Altera, which allowed the company to offset declining processor revenues and achieve 2.9% overall growth in 2015. Qualcomm slipped to number four in the rankings as its revenues fell by 14.5%, because the company's 2015 acquisition of CSR was not enough to counter declining revenues in the wireless markets. The final major deal among the top 10 in 2015 was NXP's acquisition of Freescale, which boosted it from number 15 in the 2014 rankings to number seven in 2015.

Among the top 20, Infineon's acquisition of International Rectifier enabled it to jump to number 12 in 2015. Announced deals that are expected to close in the first half of 2016 will continue to reshape the leader board. Avago Technologies continues its aggressive acquisition activity with its purchase of Broadcom. Broadcom is already ranked at number nine in 2015. The combined revenues of the two companies would place them at number five overall. ON Semiconductor's acquisition of Fairchild Semiconductor should boost it up two notches in the rankings.

Among the top 25 semiconductor suppliers, 14 companies achieved growth in 2015. This stands in sharp contrast to the overall semiconductor market where less than 42% of 285 companies tracked by IHS were able to achieve positive revenue results in 2015.

global semicon market

Figure 1: Worldwide revenue ranking for top 25 semiconductor suppliers in 2015


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