Gartner agrees 2016 chip market will fall

April 14, 2016 // By Peter Clarke
Market research firm Gartner agrees with other analysts that the 2016 global chip market will suffer a contraction but disagrees with the World Semiconductor Trade Statistics (WSTS) organization, which foresees growth.

In percentage terms Gartner is in agreement with TrendForce, that there will be a decrease of 0.6 percent in 2016 compared with 2015 (see Chip market set to shrink in 2016, says analyst ).. Gartner says the market will be worth $333 billion in 2016.

"For only the second time in its history, the worldwide semiconductor market is expected to have two consecutive years of revenue decline," said James Hines, research director at Gartner, in a statement. "We expect a decline of 0.6 percent in 2016 as the industry waits for the next demand driver to emerge."

Market research firm IHS thinks the chip market recession could even extend to three years (see Global chip market to shrink for three years, says IHS ).

Softness in the markers for personal and tablet computers and for smartphones is reducing demand for chips and there is no significant market driver in 2016 to replace this lost demand, Gartner said. While there are emerging opportunities for semiconductors in the Internet of Things (IoT) and wearable electronics, these markets are still in the early stages of development and are too small to have a significant impact on overall semiconductor revenue growth in 2016.

WSTS is the body that collects sales data from leading chip companies to try and obtain a picture of the overall market, It was still talking about 2016 growth in December 2015 (see Analog, US to lead chip market growth ).

www.gartner.com