Weak economy hurts semiconductor sales

12 December 2012

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12 December 2012 | Adam Leach

Declining activity in the automotive, consumer electronics, and data processing markets will lead to a fall in annual sales of semiconductors, according to analysts IHS.

The information provider has downgraded its forecast for semiconductor sales and predicts the market will decline by 2.3 per cent in 2012. It cited recent figures that suggest that chip sales will decline from in value from $310 billion (£192 billion) in 2011 to $303 billion (£188 billion) for this year, with demand in all but the wireless applications sector dropping.

Dale Ford, senior director of electronics and semiconductor research at IHS, said: “Five out of the six major application markets for semiconductors, including the key computer segment, are expected to contract in 2012, pulling down the overall performance of the chip market. An extremely weak global economy resulted in poor demand for electronics. As a result, the semiconductor industry slipped from stagnation in the first half of 2012 to a slump in the second half.”

The data processing sector is the most significant sector in the semiconductor market and IHS predicts that it is to drop by 7.8 per cent for the year, driven in large part by a drop in demand for PCs for the first time in 11 years. While demand for semiconductors has dropped off in the sector, an increase within the wireless sector, particularly tablets, has partly made up for the decline. The sector is expected to grow by 7.7 per cent.

For 2013, the report predicted that the sector would see 8.2 per cent growth.

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