U.S. Industrial News

IHS report: Global chip growth will remain sluggish in 2012

By admin on January 31st, 2012

Global chip growth will remain sluggish this year because of a continuing global economic uncertainty and slow inventory movement, according to an IHS report released Tuesday.

Semiconductor industry revenue is expected to increase 3.3 percent to $323.2 billion from $312.8 billion in 2011, according to the report. That will exceed last year’s 1.3 percent gain.

Len Jelinek, director of semiconductor manufacturing research at IHS, attributed much of the industry’s weak performance to external factors, such as global economic uncertainty and certain events in the United States, Europe and Japan.

IHS expects factory utilization to pick up mid-year, which means most capital expenditures to boost industry efficiency will be pushed back to 2013.

The IHS outlook comes a week after some chipmakers reported signs of improvement.

Dallas-based Texas Instruments Inc. predicted an end to the industry downturn — even as it reported lower fourth-quarter and 2011 revenue and profits from a year earlier.

TI vice president Ron Slaymaker said last weekl that the slowdown, which began in the third quarter of 2011, either ended in late 2011 or will bottom out this quarter. TI has started hiring production workers this month in expectation of higher demand.

IHS expects the strongest driver of chip revenue this year to be wireless communications, spurred by computer tablets, smartphones and industrial electronics. (TI’s OMAP 4 app processor, which is used in high-profile smartphones, tablets and e-readers, was a bright spot in fourth quarter 2011.)

The industry’s memory space, especially in dynamic random access memory (DRAM), is expected to suffer the most this year. DRAM revenue is projected to decline 16 percent this year.

If the U.S. and global economies recover by 2013, semiconductor revenue could reach nearly $398 billion by 2015, according to IHS.

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