Semiconductor market revenue projected to decline for first time in 3 years

Summary:Analysts are predicting the first annual decline for the global semiconductor industry since 2009.

A weaker global economy is hampering everyone -- including the global semiconductor market, according to market intelligence firm IHS iSuppli.

While previous forecasts were calling for a marginal growth of less than 3 percent, analysts have revised those predictions to a 0.1 percent decline in revenue for 2012.

Thus, analysts asserted this would be the first annual decline for the global semiconductor industry since 2009.

Friday's report comes just a few weeks after IHS recently projected that the abundance and growth of the wireless market, which in turn was giving a significant boost to the semiconductor sector. That subset of the global semiconductor is on track to grow by 10.9 percent to $72.6 billion in 2012.

However, IHS senior director Dale Ford noted in the report that PCs and related peripherals, in particular, are actually the key segments pulling down the semiconductor market this year.

While the introduction and shipment of exciting new products such as ultrabooks and other ultrathin PC platforms in the second half of the year will give the PC market a much needed boost, the counterweight of growing economic worries will place strong downward pressure on the overall PC market and limit both consumer and corporate spending in 2012.

Analysts added in the report that "the downward pressure" created by the PC slowdown will outweigh any growth seen by the wireless and smaller industrial electronics segments.

Nevertheless, analysts are still predicting a strong revenue growth rebound of more than 9 percent in 2013, based on expectations of improving economic conditions. That, of course, depends on how things go in the Eurozone over the rest of the year as well as upon unrest in the Middle East and slower growth in China.

Topics: Hardware, Tech Industry


Rachel King is a staff writer for CBS Interactive based in San Francisco, covering business and enterprise technology for ZDNet, CNET and SmartPlanet. She has previously worked for The Business Insider,, CNN's San Francisco bureau and the U.S. Department of State. Rachel has also written for, Irish Americ... Full Bio

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