SAN MATEO, Calif., May 10, 2016 – Worldwide semiconductor revenue will fall for a second consecutive year to $324 billion, down 2.3% from the previous year according to the latest update of the Semiconductor Applications Forecaster (SAF) from International Data Corporation (IDC). The SAF also forecasts that semiconductor revenues will log a compound annual growth rate (CAGR) of 1.9% from 2015-2020, reaching $364 billion in 2020.
An economic pause in China and emerging markets and a softening of the overall outlook this year in the U.S. are key factors that will affect global semiconductor demand this year. LTE mobile phones will continue to grow moderately by 8% this year compared to 52.5% in 2015. The automotive market and select portions of the consumer market will also continue to remain bright spots in an otherwise down year for the semiconductor industry. Ongoing weakness in consumer PC demand and oversupply will hamper memory prices for DRAM and NAND until the third quarter and result in revenues shrinking by 20% and 10%, respectively. Excluding memory from the forecast, the semiconductor market would grow 1.7% this year.
According to the SAF market update, the leading automotive semiconductor manufacturers continue to see dramatic change in market share, as Infineon Technologies displaces Renesas in the top spot, and ST Microelectronics moves ahead of the standalone Freescale.
"Company transformation continues to be a reoccurring theme across our industry as suppliers overhaul leadership, retool technology, search for new customers, and double down on their core business for stability," said Mario Morales, program vice president, Enabling Technologies at IDC. "It will be a couple of years before we realize which game plan succeeds, but even the leaders are struggling to keep pace with the cadence of the market."
"Automotive semiconductor revenue is concentrated with the top 10 suppliers, accounting for 64% of the industry's revenue and is likely to grow more concentrated as announced mergers are closed," said Nina Turner, research manager for Enabling Technologies and Semiconductors at IDC. "As both government regulations and consumers demand more features, the key drivers of electrification, connectivity, and infotainment and advanced driver assistance (ADAS) features will continue to drive growth of semiconductor content on a per automobile basis and the automotive segment is expected to grow at four times the pace of the overall market with a CAGR of 8% through 2020."
"The consumer semiconductor market fell by 11% to $46.1 billion in 2015 on weak system demand and pricing pressure in the core tablet and digital TV (DTV) markets, while semiconductor revenues grew for smart home, wearables, set-top boxes (STBs), and gaming consoles," added Research Director Michael J. Palma. "Through the 2020 forecast period, the market is expected to grow at a compound rate of 6% as consumer Internet of Things (IoT) applications should outpace market growth and DTVs benefit from the emerging 4K upgrade cycle."
Other key findings from IDC's Semiconductor Application Forecaster include:
- Semiconductor revenue for the computing industry segment will decline 6.2% this year and will show a negative CAGR of -0.9% for the 2015-2020 forecast period. One bright spot for the computing segment is forecast to be high-end storage with year-over-year growth of 6.7% for the year.
- Semiconductor revenue for the mobile wireless communications segment will fall 4.4% year over year this year with a CAGR of 0% for 2015-2020. Semiconductor revenue for LTE mobile phones will experience an annual growth rate of 8% in 2016 and a CAGR of 6.3% for 2015-2020.
- The wired communications infrastructure segment is forecast to grow 1% in 2016 with strongest growth coming from security appliances.
The IDC report, Worldwide Client PC and PC Server Microprocessor 4Q15 Vendor Shares (Doc #US40419816), contains additional detail about the worldwide market and vendor share results for PC and server microprocessor vendors.
The IDC report, Worldwide DRAM Demand and Supply 4Q15–4Q16 and 2015–2020 Update (Doc #US41078916), provides the Q4 2015 (4Q15) and calendar year (CY) 2015 DRAM vendor share results and the forecasts for both the short-term (4Q15–4Q16) and the long-term (2015–2020) worldwide DRAM market.
The IDC report, Worldwide NAND Flash Demand and Supply 4Q15–4Q16 and 2015–2020 Update (Doc #US41079016), provides the 4Q15 and CY15 NAND vendor share results and the forecasts for both the short-term (4Q15–4Q16) and the long-term (2015–2020) worldwide NAND flash memory market.
The IDC report, Worldwide Top 10 Mobile Phone Chipset and Connectivity Semiconductor 4Q15 Vendor Shares (Doc #US41096516), provides the top vendor rankings for the worldwide mobile phone chipset, applications processor, and connectivity semiconductor market for the fourth calendar quarter of 2015.
The IDC report, Worldwide Automotive Advanced Driver Assistance Systems and Microprocessor Forecast, 2015–2019 (Doc #US40732215), provides data for ADAS and microprocessors for 2014–2019, with analysis and commentary.
IDC's Worldwide Semiconductor Applications Forecaster database serves as the basis for all IDC semiconductor supply-side documents, including market forecasts and consulting projects. This database contains revenue data collected from over 140 of the top semiconductor companies for 2012-2015 and market history and forecasts for 2012-2020. Revenue for over twelve semiconductor device areas, four geographic regions, seven industries, and more than 65 end-device applications are also included in the database. For more information about the SAF, please contact Nina Turner at firstname.lastname@example.org.
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. To learn more about IDC, please visit www.idc.com.