A report from market analyst IHS says demand for seniconductors fell in 2015 and could herald three years of weak growth. Sequential quarterly growth was weak throughout every quarter of 2015, especially in the first quarter, when the market declined 8.9% over the previous quarter. That drop represented the deepest sequential quarterly decline since the market collapsed in the fourth quarter of 2008 and first quarter of 2009.
Global revenue in 2015 was $347.3billion, down from $354.3bn in 2014, and was a significant slowdown on the solid growth of 8.3% in 2014 and 6.4% in 2013. That slowdown appears to have been borne out by the latest sales figures from the European Semiconductor Industry Association. According to the association, sales of semiconductors were flat in February this year when compared to January, while global demand dipped by 3.2% compared to the previous month, at $26bn.
“Weak results last year signal the beginning of what is expected to be a three-year period of declining to stagnant growth for semiconductor revenues,” said Dale Ford, vice president and chief analyst at IHS Technology. According to Ford, weak end market demand in major segments, including wireless communications, data processing and consumer electronics, will hold back semiconductor growth.
The IHS Semiconductors Service is predicting that compound annual growth in semiconductor revenues in the five years to 2020 will be 2.1%. However it expects that, based on current technology, economic, market and product trends, that sometime between 2020 and 2022 the development of new products will drive a significant level of growth in semiconductor revenues.
Looking back on 2015,Ford highlighted the record level of merger and acquisition activity as the ‘big story’ of the year. Top players pursued a number of bold, strategic moves, suggested Ford, ‘to enhance their market position and improve overall revenue growth and profitability’.
Intel retained its number one ranking in 2015, after completing its acquisition of Altera, which allowed the company to offset declining processor revenues and achieve 2.9% overall growth in 2015.
Among significant movers were Qualcomm, which fell to number four after revenues fell 14.5%, despite the 2015 acquisition of CSR, which proved to be not enough to counter declining revenues in the company’s key wireless markets. The final major deal among the top 10 in 2015 was NXP’s acquisition of Freescale, which lifted it to seventh position from 15th in 2014.
According to the report, whereas 2014 was a year of broad-based growth, the market downturn last year left few markets unscathed – revenues for data processing, wired communications and consumer electronics all declined. Automotive and industrial electronics grew by less than 1%, while the strongest market – wireless communications – only managed to grow by 3%.
Semiconductor revenues in all regions of the world declined, and all seven major semiconductor segments (memory, microcomponents, logic ICs, analogue ICs, discrete components, optical components and sensors) experienced revenue declines from 2014 to 2015.
Only 10 semiconductor market sub-segments with annual revenues of more than $1bn grew by more than 5% year over year in 2015. Wireless communications ASICs and analogue ASICs both grew by 30%, while RF small signal transistors, wired communications logic ASICs and wireless communication ASSPs grew between 10% and 20%.
Author
Neil Tyler
Source: www.newelectronics.co.uk