Wireless shines bright in a slow chip market

August 01, 2012 // By Peter Clarke
Global semiconductor component revenue is expected to rise by 3 percent to $320.8 billion 2012, according to IHS iSuppli (El Segundo, CA). The market research firm said that wireless market growth would be a highlight in an otherwise lackluster year.

IHS projects that semiconductor component revenue in the wireless communications category for 2012 is projected to reach $72.6 billion, up 10.4 percent from $65.8 billion in 2011. Only one other category – industrial electronics, with anticipated revenue growth of 7.7 percent – will come close this year to approaching the expansion rate of the wireless segment.

Semiconductor revenue is set to rise by just 0.7 percent in wired communications, by 1.3 percent in consumer electronics and by 2.7 percent in automotive electronics. The markets for two sectors will contract in 2012 – by 1.9 percent in data processing and by 17.9 percent in memory multichip packages (MCP).

"Semiconductor manufacturers should be cautious about engaging in any activities that do not support next-generation wireless applications," said Len Jelinek, director and chief analyst of semiconductor manufacturing at IHS, in a statement.

The strength and longevity of the ongoing growth cycle will depend on how the global economy performs through the summer. Consumer spending is being watched closely for indicators of whether people are willing to spend in the coming holiday buying season. For the remainder of 2012, inventory management will remain the most critical metric for the semiconductor market.