Semi industry starting new growth cycle
The wireless IC market will grow 10% to $72.6bn in 2012, says IHS, compared to the 3% growth expected for the overall semi industry, however companies reliant on foundries are beginning to suffer.
‘The continual adoption by IDMs of an asset-light manufacturing model is now working against their favour and showing up as limitations in manufacturing,’ says IHS, ‘for either party, any inadequacies in technology or capacity will represent an inability to respond to sudden demand opportunities within the market, translating into losses and decline.’
With Qualcomm saying it will not be able to meet demand for 28nm wireless ICs until the end of the year – a situation which may delay launch of iPhone 5, the IHS analysis is particularly relevant.
For the semi industry, a new growth cycle has started. ‘Semiconductor companies acknowledge that the industry appears to have embarked on its next growth cycle upon entering the second half of 2012,’ says HIS, ‘Both pure play foundries and integrated device manufacturers (IDM) are anticipating strong growth, driven by the encouraging demand in wireless.’
This year, in contrast to the 10% rise in wireless, growth elsewhere is anaemic. Semiconductor revenue is set to rise by 0.7% in wired communications, by 1.3% in consumer electronics and by 2.7% in automotive electronics.
Revenue growth is negative this year in at least two categories—down by 1.9% in data processing and by a steep 17.9% in memory multichip packages (MCP).
“While most markets are struggling with slow growth or declines in 2012, the wireless segment continues to expand at a healthy pace, driven by strong sales gains for smartphones and media tablets,” says Len Jelinek of HIS, “because of this, the growth of the semiconductor market in 2012 is not broad-based and is only being driven by wireless. Semiconductor manufacturers should be cautious about engaging in any activities that do not support next-generation wireless applications.”