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Stefan Mileschin 20th July 2012 06:43

Chip revenues grow 4.6 percent despite industry gloom
Semiconductor revenues will grow 4.6 percent this year, according to IDC, with relatively strong demand despite macroeconomic woes and a weak PC market.

IDC forecasts for 2012 claim that the industry will grow to $315 billion, with further growth of 6.2 percent in 2013.

This is despite the Eurozone entering a state of paralysis, Chinese growth finally slowing, and chip industry players feeling the pinch.

Among others Intel saw its second quarter profits hit this week, while equipment maker ASML also saw less than impressive results.

So why the - relative - optimism from IDC? Others such as the WSTS and Carnegie have forecast flat growth this year, though Future Horizons gave a similar appraisal recently.

According to IDC analysts, while the PC market may be continuing to splutter along, smartphones and tablets are keeping the industry afloat.

Furthermore, analysts are excited about the prospects of a Windows 8 release that will hit in October, predicting that the industry will swing back to growth in the latter half of the year.

Supply conditions are also now favourable, according to IDC. Foundries are bringing more capacity online for smartphone processors and discrete graphics processors, using more advanced processes. Supply constraints are also easing up, and the industry has recovered from the disruption of flooding in Thailand.

While the return to growth will occur more slowly than in previous industry cycles due global economic pressures, there is enough to be cheerful about.

Foundries and memory producers are getting their heads around ramping up 20nm production, while Intel is churning out its 22nm Ivy Bridge chips more rapidly now.

The chip market will return to growth in the fourth quarter, IDC predicts, and demand will be pushed by Windows 8 enabled tablets, new smartphone ranges and increased enterprise IT spending.

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