
Chip market set for slow growth in 2016
This results in the new normal, a slow growth year of about 4 percent, but with more downside risk than upside potential.
The figure shows IC Insights’ assumptions behind its 2016 IC market forecast of 4 percent growth although IC Insights to band it at 2 to 6 percent growth, something in which it has 70 percent confidence.
This is likely to be a slight improvement on 2015 and is partly based on a worldwide GDP forecast to increase by 2.7 percent in 2016, 0.2 percentage points greater than the 2.5 percent growth rate registered in 2015. This is expected to drive electronics system sales to record a 2 percent increases, versus a 2 percent decline in 2015.
This confidence comes despite the fact that softening smartphone sales were partly responsible for flatness in 2015 and there are few indicators of an imminent upturn. IC Insights sees manufacturing capacity utilization in the low-90s percent range (with 300mm fabrication facility utilization expected to be in the mid-90s) in 2016. Moreover, IC unit volume growth is forecast to grow 5 percent in 2016, slightly better than the 4 percent increase in IC unit shipments registered in 2015.
IC Insights sees 2016 being characterized by a modest unit shipment increase of 5 percent accompanied by a decline in average selling prices (ASPs) of 1 percent and resulting in a market expansion of 4 percent.
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