Mobile Market Lifts Semiconductor Chip
Worldwide semiconductor revenue is expected to hit $324.6 billion in 2012, up 4.3 percent from $311.4 billion last year.
This is according to the most recent IHS iSuppli Global Manufacturing Market Tracker and is a slight increase from IHS's previous forecast of 3.3 percent predicted in January.
This is encouraging as growth last year was a minsicule 1 percent. So it looks like the semiconductor industry is regaining its footing as the overall global economy stabilises.
Assuming there isn't another worldwide recession or grave blunders by the industry, revenue will hopefully continue to climb during the next few years, and hit around $412.8 billion by 2016, as shown in the table.
"Semiconductor revenue growth is expected to rise in 2012 compared to last year as consumers begin to believe that the global economic recovery is for real," says Len Jelinek, director and chief analyst of semiconductor manufacturing at IHS.
"The biggest drivers of demand will be consumer-oriented products from the wireless semiconductor segment, such as smartphones and media tablets. The iPhone and iPad from Apple Inc. are perpetual best-sellers in their category, but a swarm of competing products will also help enlarge the total pool of offerings and thus increase sales. In particular, semiconductor suppliers can anticipate an exceptionally robust third quarter this year in preparation for strong holiday sell-through."
It may be surprising to hear that the ultrabook platform will only have a small impact on semiconductor revenue in the very near future, although that is expected to change in the long term. Having said that, since Microsoft is launching Widows 8 along with touch-screen capability later this year, ultrabooks could become a key market revenue driver in 2013.
The strongest applications in terms of semiconductor revenue growth this year are expected to be NAND flash, logic application-specific integrated circuits (ASIC) and microprocessors (MPU).
The demand for tablets and smartphones will drive revenue increases in NAND and logic ASICs, while the driver for MPUs will be continued growth in notebooks and the gradual emergence of ultrabooks.
One of the main problems that has been encountered in the industry is excess inventory, in terms of aggregate dollar value as well as in days of inventory. Both are still high despite semiconductor suppliers having reduced their inventory by 7.5 percent over the last six months.
As a result, the industry remains in a tenuous position. Further reductions are necessary for manufacturers to experience sustained demand, and companies must continue to monitor inventory levels closely to reduce them through the first half of the year.
The largest portion of inventory is held by integrated device manufacturers (IDM), who design and manufacture their own semiconductor chips. Traditionally, IDMs do not reduce inventory as aggressively as fabless semiconductor companies, firms that only produce chips. This is partly because IDMs have larger product portfolios, and also because IDMs believe that in good times they will be able to reduce inventory much more quickly.
Since the end of the second quarter of 2011, IDMs have reduced their inventory by only 5.4 percent - a minimal count when one considers that IDMs on average hold between 77 and 79 percent of finished goods inventory.
IHS maintains that sustainable growth will not occur until the industry reduces total inventory by at least another 5 percent.
IHS iSuppli Figure: Worldwide Semiconductor Industry Revenue Forecast (Billions of US Dollars)
|
|
2011 |
2012 |
2013 |
2014 |
2015 |
2016 |
|
Billions of US Dollars |
$311 |
$325 |
$355 |
$375 |
$393 |
$413 |
