Semiconductor market to grow three percent

silicon-waferThe worldwide semiconductor market is expected to grow 3 percent this year. The market has been seeing sequential growth for several consecutive quarters and most vendors believe they will end the year on a positive note, just barely.

“It has been a tough few years for the semiconductor industry. While we haven’t seen a dramatic decline in overall revenues since the 2008/2009 period the market has been pretty stagnant since 2010,” comments Peter Cooney, practice director. “We will see some growth in 2013 as the wider economic environment improves but major market growth is not expected until later in 2014, early 2015.”

The year will be remembered for several major mergers and acquisitions rather than record growth. Fujitsu and Panasonic semicon divisions are merging and Micron has scooped up Elpida. Intel has strengthened its portfolio with the ST-Ericsson GPU unit merger, while Broadcom bought Renesas Mobile’s LTE assets.

ABI Research noted that consolidation in the industry should come as no surprise, as chipmakers are forced to deal with far stiffer competition and lower margins.

“Margins are falling and the competitive environment is tough—especially in the mobile device market—this is driving vendors to re-evaluate their overall strategy and pull out of some of their once major markets. We have seen a number of major vendors exit the mobile device market – Freescale, TI, STMicroelectronics, and Renesas and we expect there are more to come,” said Cooney.