Semiconductor revenue will rise to $354 billion, says Gartner. While this is a 4% climb, it is lower than the 5.4% increase predicted in Q4’14.
The semiconductor industry is increasingly concerned about revenue growth this year. System suppliers are beginning to tackle problems stemming from local currency depreciation, relative to the US dollar; excess inventories; and the end of the Windows XP renewal cycle for PCs. These three factors have combined to lower Gartner’s forecast.
Because of the strong dollar, system suppliers and buyers are re-evaluating their strategies. Suppliers are expected to raise prices in select regions – including Europe – to keep margins intact. Some products will be de-featured to maintain current price points. Meanwhile, buyers will push out purchases in certain regions, extending product life cycles and buying down the price curve.
Smartphones, SSDs and ultramobile products will see the largest semiconductor growth this year, while the sharpest decline will come from traditional PCs. Replacement PC demand will remain ‘muted’ this year, as consumers delay migrating before Windows 10 is released. Q3’15 will be the next critical point for PCs and ultramobiles, when both Windows 10 and Intel’s Skylake platform will be introduced.
“2015 semiconductor growth hinges on the strength of the second-quarter bounce”, said Lewis. “The second quarter is traditionally where we see strong sequential growth coming off the traditionally-negative first quarter, as inventory is burned off from the holidays. First quarter 2015 looks to have the worst sequential growth since 2009, with at least a 7% decline, so a strong second-quarter bounce is needed to achieve the 4% annual growth predicted for 2015”.
