Semiconductor sales to drop by 2.4% in 2016: SIA

Article By : Dylan McGrath

The WSTS and SIA had been saying since late last year that they expected semiconductor sales to increase slightly in 2016, even as influential market research firms including Garter Inc., IHS Inc., International Data Corp. and IC Insights Inc. predicted sales declines for the year.

Semicon manufacturer Qualcomm has unveiled a reference platform for the connected car. The new platform addresses the requirements of across a range of applications including wireless key technologies– LTE, GNSS, WiFi, DSRC/V2X and Bluetooth.

The Semiconductor Industry Association (SIA) trade group has joined the chorus of market watchers who expect semiconductor sales to decline in 2016.

The SIA on Tuesday (June 7) endorsed a revised forecast by the World Semiconductor Trade Statistics (WSTS) organisation, which calls for semiconductor sales to decline by 2.4% in 2016. The WSTS and SIA had been saying since late last year that they expected semiconductor sales to increase slightly in 2016, even as influential market research firms including Garter Inc., IHS Inc., International Data Corp. and IC Insights Inc. predicted sales declines for the year.

The WSTS on Tuesday issued a revised forecast that calls for chip sales to decline to $327 billion this year, followed by a return to modest growth in 2017 and 2018. The WSTS forecasts growth in optoelectronics, sensors and analogue ICs, which will be more than offset by declines of 10% and 2.5% in memory and logic chips, respectively. The latest WSTS forecast projects declines across all regions, with the U.S. expected to show the largest drop.

”The latest industry forecast suggests global sales may indeed rebound somewhat in the second half of 2016, but still fall short of last year’s total,” said John Neuffer, SIA president and CEO, in a statement.

The WSTS compiles sales data and forecasts based on data provided by 55 semiconductor companies.

__Figure 1:__ *Forecast created at the WSTS Spring Forecast Meeting, May 24-26. (Source: WSTS)*

In April, the three-month rolling average of chip sales declined to $25.8 billion, down 1% from March and down 6.2% from April 2015, according to the WSTS.

Neuffer said the April decline continued a recent trend of market sluggishness driven by “soft demand and a range of macroeconomic headwinds.” He said sales of microprocessors and analogue ICs increased modestly in April compared to the April 2015.

The WSTS forecast projects that chip sales will grow by 2% next year and by an additional 2.2% in 2018.

On Wednesday, the SIA applauded approval by the U.S. Congress of bipartisan legislation that updates the Toxic Substances Control Act of 1976. The SIA said the U.S. Senate passed the legislation Tuesday in a voice vote after the House of Representatives approved it on May 24. U.S. President Barack Obama is expected to sign the legislation into law, according to the SIA.