The chip market will fall 2.3% in 2016, says IDC.

For the second year running IC revenues will see a decline, falling to $324 billion, says IDC.

Revenues are forecast to log a 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 in the US are key factors that will affect global semiconductor demand in 2016, says IDC.

LTE mobile phones will continue to grow moderately by 8% in 2016 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% in 2016, says IDC.

Leading automotive semiconductor manufacturers continue to see dramatic change in market share, as Infineon Technologies displaces Renesas in the top spot, and STMicroelectronics moves ahead of the standalone Freescale, says IDC.

“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,” says IDC’s Mario Morales, “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,” says IDC’s Nina Turner, “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,” says IDC’s Michael 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.”

In addition, IDC found that semiconductor revenues for the computing industry segment will decline 6.2% in 2016 and will show a negative CAGR of 0.9% for 2015-2020.

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 revenues for the mobile wireless communications segment will fall 4.4% on year in 2016 with a CAGR of 0% for 2015-2020, IDC indicated.

Semiconductor revenues for LTE mobile phones will experience an annual growth rate of 8% in 2016 and a CAGR of 6.3% for 2015-2020.

Meanwhile, the wired communications infrastructure segment is forecast to grow 1% in 2016 with strongest growth coming from security appliances, IDC said.

By: DocMemory
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