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Slowdown in PCs, smartphones to drag chip sales

Posted: 20 Jul 2015     Print Version  Bookmark and Share

Keywords:Gartner  PC  smartphone  chip sales  Internet of Things 

According to the latest data from Gartner, semiconductor sales are in a two-year slump due to weak demand for PCs and smartphones. The Internet of Things and China are generating excitement, but are not projected even in the medium term to yield a remarkable boost.

Chips sales will rise only 2.2 per cent this year and have a nearly flat 1.3 per cent growth next year, market watcher Gartner stated. Chip growth will return to a more typical 4-5 per cent from 2017-2019, Gartner predicted based on modest pickup in mainly traditional markets.

Semiconductor revenue

Semiconductors won't return to typical 4-5 per cent growth rates until 2017, Gartner said.

Overall PC sales will decline 8.7 per cent this year. Its sweet spot, notebooks and ultramobiles, will fall 1.9 per cent, down from its previous forecast of 6.2 per cent growth, Gartner now predicts.

"Any hitch with the rollouts of Microsoft Windows 10 and Intel's next-generation CPU Skylake this fall could lower our estimates further," said Bob Johnson, a Gartner analyst.

Even cellphones are slumping with growth of just 0.7 per cent predicted, down from three per cent. "We are seeing end user demand problems that tend to pull down semiconductor revenues," said Johnson.

In memory, DRAMs will be in oversupply in H2 as new Samsung and Hynix fabs come online. The good news is NAND flash will grow at an 8.1 per cent compound rate through 2019, largely due to the rise of solid-state drives.

Samsung's 3D NAND is still shipping only in its merchant SSDs, Johnson said, suggesting their yields were still low and costs high. Micron/Intel and SK Hynix will start shipping 3D NAND by the end of the year with Toshiba/SanDisk following, he said.

"By 2018 we think almost half the flash bits shipped will be 3-D NAND, and that will jump up dramatically in 2019," Johnson said. "My gut feeling is a lot of it will be conversions of existing fabs," he added.

The slow silicon growth will dampen spending on capital equipment. Gartner predicts capex gear sales growth of just 2.5 per cent this year, down from 4.1 per cent predicted three months ago. Capex gear sales will decline 3.3 per cent next year, Johnson said.

Chip revenues from smartphones

Chip revenues from smartphones are nearing a peak, Gartner said.

Little help from IoT, China

The Internet of Things will drive up to $43.5 billion in semiconductor sales by 2020, but that's just barely above 10 per cent of a $400+ billion total market by that time. The cost-squeezed IoT market will not be a huge buyer of chips.

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