Chip market set to shrink in 2016, says analyst

December 09, 2015 // By Peter Clarke
Taiwanese market analysis firm TrendForce says that falling memory average selling prices will drag down the overall chip market in 2016 and cause it to fall by 0.6 percent to $329 billion.

TrendForce disagrees with World Semiconductor Trade Statistics (WSTS), which recently forecast that chip market would grow by 1.4 percent in 2016 to $341 billion (see Analog, US to lead chip market growth ).


TrendForce bases its conclusion of a falling market in 2016 on slowing growth in the mobile communications industry. This will lead to a growth of 0.9 percent in 2015 – higher than WSTS's estimate of 0.2 percent growth. The decline in sales of memory products will become steeper in 2016, TrendForce said.  

The memory market will be in oversupply in 2016. Both DRAM and NAND Flash sales will slide causing total memory IC sales revenue to fall 7 percent in 2016 after a 1.5 percent growth year in 2015.  

In 2016 PC shipments will level off and IC types will move around, more SoCs and less discrete processors and GPUs and overall the sales revenue of digital chips will decline by 0.7 percent year-on-year.

The growth will be in analog, optical, sensors and discrete semiconductors, with automotive electronics and high-resolution CMOS image sensors becoming demand drivers, TrendForce claims. Analog IC sales will grow 3.5 percent in 2016.

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