IDC cuts growth rates in chip sales, how do others compare?

Spurred on by technological innovation including the launch of Windows 8, IDC predicts steady growth in the market until 2016 -- but reduced from earlier predictions.

Spurred on by technological innovation, the International Data Corp (IDC) predicts steady growth in the sale of chips.

The Inquirer reports that IDC views the semiconductor industry's future as a concept likely to be boosted through the growth of mobile technology. The consumer purchase trends that show an increasing demand for smartphones, tablets and automotive electronics will also push for a growth spurt in chip sales.

Therefore, IDC has forecast that in 2012, semiconductor revenues will grow 4.6 per cent to hit $315bn, and that 2013 will see 6.2 per cent growth to $335bn. The firm had previously forecast earlier this year that sales of chips would grow between 6 and 7 percent by the end of 2012.

IDC's reduced forecast remains closer to the high end of market research estimates. The EE Times compiled a range of market growth forecasts, and these ranges from marginal percentage changes to 8.6 percent. Most market experts are expecting a growth of 2 to 5 percent this year. Some of the estimates include:

  • Semico Research: 8.6 percent growth;
  • Gartner: 4 percent growth;
  • VLSI Research: 2.3 percent increase;
  • WSTS: 0.4 percent;
  • Carnegie Group: 0 percent.

The IDC's higher-end forecast, even taking the reduction into consideration, is down to chip fabrication switching to newer process nodes, which are now increasingly commercially viable. The company predicts that the communications industry will experience the largest surge in growth; while PC and mobile markets will experience a lower growth rate -- 3.7 and 5 percent respectively. The DRAM industry, however, will continue to plummet according to the predictions due to the a disastrous 2011 experience by the industry as a whole.

Mali Venkatesan, research manager for semiconductors at IDC said:

"Supply constraints on semiconductor products, such as smartphone applications processors and PC discrete graphics processors, based on the most advanced process technologies are easing as foundries are bringing more capacity online. Also, the semiconductor industry has recovered from the flooding in Thailand that held back the supply of hard drives and PCs.
Leading-edge 22nm at Intel is ramping fast now, while foundries and memory companies are getting ready to move to 20nm technology node."

In the short term, IDC expects Microsoft's Windows 8 platform to offer chip sales a boost. The operating system's launch is expected on 26 October this year.