Gartner Lowers 2015 Semiconductor Growth Forecast

Worldwide semiconductor revenue will reach $358 billion this year: a 5.4% YoY increase, says Gartner, which is lower than the forecast made in Q4’14 of 5.8% growth.

Application-specific standard products (ASSPs) in smartphones, as well as DRAM and NAND flash in ultramobiles and solid-state drives (SSDs), are driving the semiconductor market.

As DRAM returns to more traditional price reductions and the industry burns off excess holiday inventory, revenue growth will slow from 2014’s 7.9%, says Gartner’s Jon Erensen. DRAM was in short supply in 2014, but supply and demand will level out this year.

The largest dollar increase will come from smartphones, SS Ds and ultramobiles. Compute applications will be semiconductors’ largest market this year, followed by wireless and consumer applications. These three categories combined represent more than 65% of semiconductor revenue. However, the industrial electronics segment is expected to outperform the overall semiconductor market, with 9.1% growth (mainly driven by LED lighting applications). The IoT will also be a strong unit growth driver this year and beyond.

Wireless applications – mainly mobile phones – will be the second-largest growth market in 2015, although the revenue growth forecast is the same as that made in Q4’14.

While mobile phone semiconductor sales will remain robust, driven by the accelerating shift to smartphones and 4G Long Term Evolution, there is concern that weak sell-through for other electronic equipment categories will result in higher inventory levels and drag down semiconductor sales in the first quarter of 2015″, said Erensen