Semiconductor revenue will dip 0.8 percent to $337.8 billion in 2015, according to Gartner. This is the first decline in semiconductor revenue since 2012 when the market fell 2.6 percent.
Earlier, Gartner predicted that the global semiconductor market will grow 2.2 percent this year.
“The outlook for the applications that drive the semiconductor market, including PCs, smartphones and tablets, has been revised downward. The impact of the strong dollar on demand in key markets outside of the U.S., has resulted in a decline in our forecast and a negative growth rate for 2015,” said Andrew Norwood, research vice president at Gartner.
The report said global economic headwinds, such as the slowing Chinese economy and the strong dollar, are pushing up the cost of electronic equipment in regions including Western Europe and Japan. This is leading to a reduction in outright sales and also encouraging buyers to shift to lower-cost equipment in these markets.
Gartner predicts that semiconductor revenue will increase 1.9 percent to $344.1 billion in 2016. However, Gartner forecasts an oversupply in DRAM in 2016.
2016 will see a more widespread oversupply that will also impact the server and low-power sectors of the DRAM market. DRAM revenue is forecast to decline 12.2 percent in 2016 due to oversupply and resulting weak pricing.
