Due to weaknesses in ‘key’ electronics segments – including smartphones and PCs – worldwide semiconductor revenue is expected to shrink 0.8% YoY in 2015. According to Gartner, the fall (to $337.8 billion) will be the first revenue decline since the 2.6% contraction in 2012. The new forecast is down from Gartner’s previous expectation of 2.2% growth.
As well as weaknesses in the mobile and PC markets, the strong dollar is having an effect on the semiconductor market. After a poor start to the year, Gartner is not seeing the typical semiconductor sales ramp that usually towards the end of the year. “As a result, sales are not going to recover enough in the second half to halt an annual decline in semiconductor revenue for 2015”, said Gartner’s Andrew Norwood.
Trends in the global economy – such as the slowing of the Chinese economy and, again, the strong dollar – are increasing the cost of electronic equipment in various markets, such as Japan and Western Europe. This leads to a reduction in sales and encourages buyers to adopt lower-cost products.
The outlook for 2016 is more positive. Gartner expects semiconductor revenues to rise 1.9% YoY, to $344.1 billion.