IDC joins forecasters predicting chip market fall

May 18, 2016 // By Peter Clarke
Fall hazard
IDC has become the latest market researcher to agree that the global chip market will fall in 2016.

IDC puts that contraction at 2.3 percent with the global market shrinking to $324 billion. The firm also predicts that semiconductor revenues will achieve a compound annual growth rate (CAGR) of 1.9 percent over the period 2015 to 2010, to reach $364 billion in 2020.

Two other market researchers, Gartner and TrendForce, have previously predicted a contraction of 0.6 percent (see Gartner agrees 2016 chip market will fall and Chip market set to shrink in 2016, says TrendForce) Meanwhile Semico and IHS had also predicted a decline without quantifying it (see Global chip market to shrink for three years, says IHS and Chip market will fall in 2016, says Semico).

Like its peers IDC puts the shrink down to an economic pause in China and emerging markets, which has in turn affected the US.

The market for LTE-capable mobile phones will grow by 8 percent in 2016, compared with 52.5 percent in 2015, IDC said. Weakness in consumer PC demand continues and also pulls down prices for DRAM and NAND flash which will see their global revenues shrink by 20 and 10 percent respectively. If memory were excluded from the forecast, the semiconductor market would show 1.7 percent growth in 2016.

Bright spots include automotive semiconductors, which will show 8 percent CAGR through 2020.  Consumer will bounce back to achieve a 6 percent CAGR over the period 2015 to 2020, driven by consumer IoT and the 4K television upgrade cycle, the firm said.