The global semi-conductor revenue is projected to total $311 billion in 2013, a 4.5 per cent increase from 2012, according to research and advisory firm Gartner.
Due to the economic headwinds and an inventory correction, the fourth quarter projections have been revised down from the previous quarter's forecast of $330 billion.
Analysts have also reduced growth predictions for 2012 with semiconductor revenue expected to total $298 billion, down 3 per cent from 2011. Gartner's third quarter forecast had put revenue at $309 billion for 2012, an increase of 0.6 per cent from 2011, it said.
“The looming fiscal cliff, ongoing European debt crisis, slower emerging market growth and regional tensions have all played a part in reduced growth projections for semiconductor revenue in both 2012 and 2013. Inventory levels were already high at the start of the second-half of 2012, and as PC demand rolled off, supply simply overshot demand,” said Peter Middleton, principal analyst at Gartner.
The semiconductor market was further depressed when Dynamic Random Access Memory (DRAM) prices failed to rebound in 2012. Gartner predicts that the DRAM market will not recover until the second half of 2013, when lower supply growth is expected to pull the market into a period of under supply. This should prove a turning point for the semi-conductor industry, memory is expected to lead the recovery with 15.3 per cent growth and total semiconductor revenue is projected to reach $342 billion in 2014, a 9.9 per cent rise from 2013.
DRAM is a type of random-access memory that stores each bit of data in a separate capacitor within an integrated circuit.
PC PRODUCTION
PC production will decline 2.5 per cent in 2012. In 2013, total PC production is expected to remain weak. However, ultramobile PCs will grow strongly off a small base. The challenging economic environment has contributed to PC lifecycle extension in addition to users extending the life of their PCs as they adopt tablets.
Mobile phone production growth in 2012 and 2013 is predicted to soften overall as the tough economy reduces the short-term demand for phones. However, the forecast for utility/basic smart phones has been increased, largely at the expense of traditional phones. In particular, adoption of Android-based entry-level smart phones in emerging regions continues to accelerate and will be a key growth driver. Worldwide smart phone unit production growth in 2013 is forecast to be 33 per cent.
Media tablet production is also forecast to grow in 2013, rising 38.5 per cent to 207.1 million units, up from the third quarter forecast of 169.8 million units. The success of the Amazon Kindle Fire, Google Nexus 7 and Apple iPad Mini illustrate the large opportunity for smaller tablets at the right price, while the white-box tablet market is stronger than anticipated, boosting overall forecast.