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Worldwide semiconductor sales swell seven percent due to DRAM explosion

But Gartner predicts the next big memory downturn will hit in 2016
Thu Jul 10 2014, 12:22

SEMICONDUCTOR REVENUE has grown by almost seven percent worldwide, analyst firm Gartner has said.

In its forecast for the second quarter, Gartner said that revenue is expected to reach $336bn this year, up 6.7 percent from the same quarter last year. The growth has surpassed analysts' earlier expectations, up from the previous quarter's forecast of 5.4 percent growth.

The growing trend is particularly evident in companies such as foundry leader TSMC, Gartner explained, which is expecting a sequential growth in the second quarter of this year by over 20 percent.

But, according to Gartner, DRAM is responsible for the growth and in the chip market this year is expected to lead with a 18.8 percent annual growth. This is because DRAM pricing remains firm, and coupled with growth in key system markets, this is helping propel the DRAM market to an estimated $41bn in 2014.

"Other areas are also doing well, including analog, field programmable gate arrays (FPGAs), application-specific integrated circuit (ASICs), and non optical sensors," said Gartner VP of research Bryan Lewis. "ASICs are driven by Apple, with strong sales of its iPhone expected in the second half of 2014. ASICs will also benefit from the strong ramp of the latest video game console generation, particularly the Sony PS4 and Microsoft Xbox One."

However, the analyst outfit said memory is a "feast-and-famine" market due to big supply and demand cycles, and it predicted that the next big memory oversupply downturn to hit in 2016, weakening overall semiconductor growth.

However, Lewis claimed that overall semiconductor growth is widespread, with the non-memory segment growing 5.2 percent in 2014, compared with only 0.8 percent the year before. Smartphones and "ultramobile" devices, including tablets, are the growth areas from a system point of view, Gartner added.

On Monday, Gartner reported that the PC market - which it counts as desktops, notebooks and "premium ultramobile devices" - will surge by over five percent this year. However, it will still be in negative figures, increasing from minus 9.5 percent in 2013 to minus 2.9 percent in 2014.

However, Gartner said that the traditional PC market, which consists of desktop and notebooks only, will still be in decline and follow the same downward trend, on pace to contract 6.7 percent in 2014 and 5.3 percent in 2015. µ


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