News from Semiconductor Intelligence, LLC -- May 2016

 weSRCH's Best of the Internet Award
  31st-May-2016
 83

Semiconductor Intelligence, LLC

Semiconductor Intelligence Newsletter
Relevant news and analysis for the semiconductor industry

May / 2016

Semiconductor market going negative?

Several recent forecasts for the 2016 semiconductor market point to a decline. The title of this newsletter is the same as we used for our October 2015 newsletter. In October, Semiconductor Intelligence projected the market would grow 1.0% in 2015 despite several predictions of the market going negative. 2015 finished with a slight 0.2% decline. The chart below shows four forecasts in the last two months calling for a negative 2016, ranging from a 0.6% decline from Gartner to a 2.3% decline from IDC. Databeans projects 3.0% growth. We at Semiconductor Intelligence are calling for 1.0% growth in 2016. For 2017 semiconductor market growth, Mike Cowan's May forecast was 6.1%. We at Semiconductor Intelligence are projecting 7.5% growth.

What is behind the weak 2016 outlook? According to World Semiconductor Trade Statistics (WSTS), the 1st quarter 2016 semiconductor market declined 5.5% from 4Q 2015, the weakest first quarter since the recession in 2009. However, there are signs of improvement in 2Q 2016. The table below shows 1Q 2016 revenue growth versus 4Q 2016 and guidance for 2Q 2016 for the largest semiconductor suppliers.

Key Semiconductor Company Revenue

Change versus prior quarter in local currency

Reported

Guidance

Company

1Q16

2Q16

Comments on 2Q

Intel

-8.1%

-1.5%

high end +2.2%

Samsung

-15.6%

n/a

solid DRAM & SSD demand

Qualcomm

-18.5%

0.9%

high end +8.1%

SK Hynix

-17.2%

n/a

solid DRAM & SSD demand

Micron

-12.4%

0.5%

high end +5.7%

TI

-5.7%

5.4%

high end +10.8%

Toshiba

0.3%

n/a

NXP

38%

5.4%

1Q includes Freescale

Infineon

1.0%

2.0%

high end +4%

MediaTek

-9.4%

28.0%

China handset demand

ST

-6.5%

5.5%

high end +9%

Renesas

1.8%

n/a

uncertain after earthquake

1Q 2016 revenues declined from 4Q 2015 for most companies, including double-digit declines for the Memory companies (Samsung, SK Hynix and Micron) and Qualcomm. NXP's 38% growth is a result of its acquisition of Freescale. The outlook is fairly strong for most companies in 2Q 2016. All but Intel are projecting growth, with Intel's high end guidance for 2.2% growth. The high end guidance for Qualcomm, TI and ST is in the 8% to 10% range. MediaTek is guiding 28% growth in 2Q 2016 based on strong handset demand from China. Broadcom is not included since it is in the process of integrating its merger with Avago.

The outlook for key end equipment is major factor for the weak semiconductor market in 2016. Gartner's March 2016 forecast for PC plus tablet units is a 2.5% decline in 2016, following a 10% decline in 2015. Growth is projected at a positive 2.5% in 2017. Mobile phone units are projected to show growth in only the 1% to 2% range. The International Monetary Fund's (IMF) April 2016 forecast is 3.2% global GDP growth in 2016, only slightly higher than 3.1% in 2015. GDP is expected to pick up to 3.5% growth in 2017.

Forecast Annual Change

2015

2016

2017

Source

PC + Tablet Units

-10%

-2.5%

2.5%

Gartner, March

Mobile Phone Units

2.0%

1.4%

2.1%

Gartner, March

Global GDP

3.1%

3.2%

3.5%

IMF, April

Our Semiconductor Intelligence forecast of 1.0% semiconductor market growth in 2016 takes into account the weak end markets. However, the 2Q 2016 outlook for major suppliers is encouraging. The growth acceleration for end equipment and GDP in 2017 leads to our forecast of 7.5% growth in 2017.

Semiconductor Intelligence is a consulting firm providing market analysis, market insights and company analysis for anyone involved in the semiconductor industry - manufacturers, designers, foundries, suppliers, users or investors. Please contact me if you would like further information.

Sincerely,


Bill Jewell
Semiconductor Intelligence, LLC

billjewell@sc-iq.com

Join Our List

Join Our Mailing List

Semiconductor Intelligence, LLC, 154 Windmill Trail, Placitas, NM 87043

Domain: Electronics
Category: Semiconductors
weSRCH App on Apple

Recent Newsletters

12 March, 2019
10 October, 2018
15 February, 2018