SAN FRANCISCO -- Market research firm IHS iSuppli Wednesday(April 25) lifted its forecast for the 2012 semiconductor market, citing strongongoing consumer demand for wireless products like cell phones and mediatablets.
IHS (El Segundo, Calif) is now forecasting that total chipsales will reach an estimated $324.6 billion in 2012, up 4.3% from last year.The market research firm previously forecasted an increase of 3.3% for the chipmarket this year.
Gartner Inc, a rival market research firm, increased itsforecast for the 2012 chip market in March. Gartner now expects chip sales toincrease 4% to $3.16 billion this year.
Barring an unforeseen economic slump in world markets orgrave missteps by the chip industry, revenue should continue to climb duringthe next few years, hitting approximately $412.8 billion by 2016, according tothe latest IHS forecast.
"Semiconductor revenue growth is expected to rise in2012 compared to last year as consumers begin to believe that the globaleconomic recovery is for real," said Len Jelinek, director and chiefanalyst of semiconductor manufacturing at IHS.
Jelinek said the biggest drivers of semiconductor demand in2012 would be consumer-oriented products like smartphones and tablets. Inaddition to Apple Inc's iPhone and iPad, a swarm of competing products willalso help drive semiconductor sales, Jelinek said.
"In particular, semiconductor suppliers can anticipatean exceptionally robust third quarter this year in preparation for strongholiday sell-through," Jelinek said.
IHS predicted that the Intel-backed Ultrabook low-powernotebook PC platform would have only a minimal impact on 2012 semiconductorrevenue. But the forthcoming introduction of Microsoft Corp's Windows 8 -- thefirst version of the PC operating system that will support touchscreencapability -- means that Ultrabooks have the potential to become a key marketrevenue driver in 2013, IHS said.
The three major areas of strength for the semiconductorindustry this year will be NAND flash, logic ASICs, and microprocessors,according to the IHS foecast. The revenue increases in NAND and logic ASICs willcome as a result of growth in sales of tablets and smartphones, while therevenue expansion in microprocessors will be driven by renewed growth innotebooks and the gradual emergence of Ultrabooks, according to IHS.
But IHS warned that the semiconductor industry is in atenuous position because inventory remains at high levels, despite the factthat chip suppliers have reduced their inventory by 7.5% over the last sixmonths. Further inventory reductions are necessary for manufacturers to experiencesustained demand, and companies must continue to monitor inventory levelsclosely to reduce them through the first half of the year, IHS said.
According to IHS, the largest portion of inventory is heldby integrated device manufacturers, which traditionally do not reduce inventoryas aggressively as fabless semiconductor companies. Since the end of the secondquarter of 2011, IDMs have reduced their inventory by only 5.4%, IHS said. Thefirm warned that sustainable growth will not occur until the semiconductorindustry reduces total inventory by at least another 5%.
This story was originally posted by EETimes.