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Revenue growth for 2014 looking bleak, says IC execs

Posted: 13 Dec 2013     Print Version  Bookmark and Share

Keywords:KPMG  semiconductor industry  revenue growth 

As a result of the slow pace of revenue growth this year, chip executives have become more conservative about their expectations for a sustained semiconductor recovery next year. The consulting firm surveyed 193 semiconductor industry business leaders to create this year's Industry Confidence Index, which remains flat at 57, indicating a still slightly positive perception. The index is formed by five factors: capital spending change, R&D spending change, profitability spending change, workforce change and semiconductor revenue growth.

"There was a lot of momentum, excitement a year ago for how the industry would turn out in 2013," Gary Matuszak, global chair of KPMG's technology, media and telecommunications practice, said in an interview with EE Times. "This year the index is a somewhat muted expectation in that it's the same year over year."

The index increased from 46 to 57 in the 2012 survey. Overall revenue growth predictions were fairly consistent this year, with 77 percent of executives expecting increases compared to 75 percent the previous year.

IC industry leaders tone down expectations for 2014

KPMG: What we saw is a lot more revenue increase in 6 to 10 percent [growth] range as opposed to last year.

"What we saw is a lot more revenue increase [expectations] in the 6 to 10 percent range as opposed to last year," Matuszak said, adding that there was an eight percent decrease in those expecting revenue growth of more than 10 percent. "The calibration of those increases is coming down year over year."

Reductions in higher revenue growth predictions, coupled with higher percentages of respondents expecting modest growth, reflect the industry's trend into a mix of broader applications and geographic markets. This results "in less volatility combined with a slowing growth rate for mobile devices," a KPMG release stated.

Seventy-seven percent of executives expect increases in revenue growth next year, compared to 75 percent the previous year. "What we saw is a lot more revenue increase in 6 to 10 percent [growth] range as opposed to last year," a KPMG official said.

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