IC Insights Cuts 2016 Semiconductor Market Growth Estimate to -1%

12 Jul

Based on IC Insights’ latest report, it’s projected that the global semiconductor market growth will show a 1% decline in 2016. The weakened momentum is the result of the global market’s slow economic growth and the impact of UK’s EU exit, said IC Insights.

The growth of the semiconductor industry is reliant on the state of the global economy. Nearly no strong semiconductor industry can survive without the support of vibrant global economic growth. Therefore, IC Insights projects that the growth rate of global semiconductor industry will be closely associated with that of the global economy.

IC Insights’ forecast of the semiconductor industry’s 1% decline is mainly based on its earlier prediction of the average 2016 global economic growth at 2.3% and the weak DRAM market. As many regions worldwide saw slowing economic growth, China, the major market of PC, digital television and smartphones, witnessed a slowdown too. The country’s GDP is set to lose its traction this year, and will see economic growth of only 6.6%.

Meanwhile, the global economic growth is also expected to be negatively impacted by the UK’s Brexit vote over the next one to two years. Another factor is the weakening demand in the DRAM market, which is expected to see  a growth decline of around 19% this year despite being the largest single product sector in the entire semiconductor industry in 2015. This decline is likely to result in a potential 3% drop in the entire global semiconductor industry’s growth by the end of this year.

Excluding the entire DRAM market, the semiconductor industry’s growth could have reached approximately 2% this year.

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