Global chip revenue forecast to rise 12.3% this year: Gartner
SINGAPORE — Worldwide semi-conductor revenue is forecast to total US$386 billion (S$539 billion) this year, up 12.3 per cent from 2016, IT research firm Gartner said in a report released on Monday (April 17).
SINGAPORE — Worldwide semi-conductor revenue is forecast to total US$386 billion (S$539 billion) this year, up 12.3 per cent from 2016, IT research firm Gartner said in a report released on Monday (April 17).
Favourable market conditions that gained momentum in the second half of last year, particularly for commodity memory, have accelerated and raised the outlook for the market for this year and next, it said.
“While price increases for both DRAM and NAND flash memory are raising the outlook for the overall semi-conductor market, it will also put pressure on margins for system vendors of smartphones, PCs and servers,” said Mr Jon Erensen, research director at Gartner.
“Component shortages, a rising bill of materials, and the prospect of having to counter by raising average selling prices (ASPs) will create a volatile market in 2017 and 2018,” he added.
PC DRAM pricing has doubled since the middle of last year, Gartner noted. A 4GB module that cost US$12.50 has jumped to just under US$25 today. NAND flash ASPs increased sequentially in the second half of last year and the first quarter of this year. Pricing for both DRAM and NAND is expected to peak in the second quarter of 2017, but relief is not expected until later in the year as content increases in key applications, such as smartphones, have vendors scrambling for supply, Gartner said.
“With memory vendors expanding their margins though 2017, the temptation will be to add new capacity. We also expect to see China make a concerted effort to join the memory industry, setting the market up for a downturn in 2019,” said Mr Erensen.
Unit production estimates for premium smartphones, graphics cards, video game consoles and automotive applications have improved and contributed to the stronger outlook this year. In addition, electronic equipment with heavy exposure to DRAM and NAND flash, including PCs, ultramobiles, servers and solid-state drives, saw semi-conductor estimates increase.
“The outlook for emerging opportunities for semi-conductors in the Internet of Things and wearable electronics remains choppy with these markets still in the early stages of development and too small to have a significant impact on overall semiconductor revenue growth in 2017,” said Mr Erensen.