Worldwide semiconductor revenues are expected to improve in 2013 to reach US$319 billion, after seeing growth of less than 1 percent in 2012 due to weak demand.
IDC released its Semiconductor Applications Forecaster Wednesday, and it revealed 2012 will see nominal, sub-1 percent growth to reach US$304 billion by the end of the year. The downward revision from its mid-year predictions was attributed to various reasons, including weak PC demand, price deterioration of DRAM and overall memory chip prices, and inventory rationalization, it noted.
Macroeconomic factors also played a part. Lower global GDP growth, slowdown in China, the Eurozone debt crisis and recession, Japan's recession, and ongoing fear of fiscal cliff negotiations in the United States were all identified as "levers" affecting worldwide demand for semiconductor products, the report stated.
The new year will see an improvement though, with the research firm forecasting revenues to improve by 4.9 percent to US$319 billion. It also stated the industry will log a compound annual growth rate (CAGR) of 4.1 percent from 2011 to 2016, reaching US$368 billion in four years' time.
"We expect lower, but positive global GDP growth in 2013. Semiconductors for smartphones will see healthy revenue growth as appetite for data, multimedia processing, and multitasking will drive high-end smartphone demand in developed countries, while an ongoing transition to 3G networks will accelerate smartphone adoption in developing regions," said Mali Venkatesan, research manager for semiconductors at IDC, in the study.
PC demand, however, will continue to remain in a period of transition next year until more technology and design innovation begin to change the course of demand, Venkatesan added.
Asia still bubbly
In terms of regional forecasts, IDC said Asia-Pacific will continue to grow its share of semiconductor revenues and outpace global growth estimates. It expects the region to hit year-on-year growth of 5.5 percent in 2013, and a 5-year CAGR of 5.3 percent.
China and India, in particular, will continue to show strong demand as people remain hungry for smartphones, tablets and automotive electronics, it noted.