How semiconductor market will perform this year

IDC has shared the latest statistics and drivers for the global semiconductor industry for the year 2016.

Semiconductor revenue will dip 2.3 percent to $324 billion in 2016, according to IDC.

Semiconductor revenues will achieve a compound annual growth rate (CAGR) of 1.9 percent from 2015-2020, reaching $364 billion in 2020.

Factors such as economic pause in China and emerging telecom markets and softening of the overall outlook in the U.S. will affect semiconductor demand this year.

LTE smartphones will grow by 8 percent in 2016 against 52.5 percent in 2015.

The automotive market and select portions of the consumer market will remain bright spots for the semiconductor industry.

Weakness in consumer PC demand and oversupply will hamper memory price — resulting into 20 percent dip in DRAM and 10 percent drop in NAND revenue until the third quarter. Excluding memory from the forecast, the semiconductor market would grow 1.7 percent this year.

According to the SAF market update, Infineon Technologies displaces Renesas in the top spot, and ST Microelectronics moves ahead of the standalone Freescale.

Automotive semiconductor revenue is concentrated with the top 10 suppliers, accounting for 64 percent of the industry’s revenue.

The drivers of electrification, connectivity, and infotainment and advanced driver assistance (ADAS) features will drive growth of semiconductor content on a per automobile basis and the automotive segment is expected to grow at four times the pace of the overall market with a CAGR of 8 percent through 2020, said IDC.

IDC said the consumer semiconductor market fell 11 percent to $46.1 billion in 2015 on weak system demand and pricing pressure in the core tablet and digital TV (DTV) markets, while semiconductor revenues grew for smart home, wearables, set-top boxes (STBs), and gaming consoles.

Through the 2020 forecast period, the consumer semiconductor market is expected to grow at a CAGR of 6 percent as consumer Internet of Things (IoT) applications should outpace market growth and DTVs benefit from the emerging 4K upgrade cycle.

Semiconductor revenue for the computing industry segment will decline 6.2 percent and will show a negative CAGR of 0.9 percent for the 2015-2020 forecast period. High-end storage will grow at 6.7 percent in 2016.

Semiconductor revenue for the mobile wireless communications segment will fall 4.4 percent this year with a CAGR of 0 percent for 2015-2020.

Semiconductor revenue for LTE mobile phones will have an annual growth rate of 8 percent in 2016 and a CAGR of 6.3 percent for 2015-2020.

The wired communications infrastructure segment is forecast to grow 1 percent in 2016 with strongest growth coming from security appliances.