Sourcetoday 547 Vicjpg 1
Sourcetoday 547 Vicjpg 1
Sourcetoday 547 Vicjpg 1
Sourcetoday 547 Vicjpg 1
Sourcetoday 547 Vicjpg 1

IC Market Set for Slow Growth in 2016

Feb. 8, 2016
Slow-growth economy yields cautious optimism in electronic components industry.

A new report from market researcher IC Insights expects IC (integrated circuit) market growth rates to closely mirror the slowly growing worldwide GDP in 2016. IC Insights predicts 2.7% worldwide GDP growth this year, “only marginally ahead of what is considered to be the recession threshold of 2.5% growth,” the company said in announcing its 2016 McClean Report, an annual analysis and forecast of the integrated circuit market. 

Slowing growth in China is a case in point, as the country’s economic growth slipped below 7% last year and is forecast to lose momentum this year as well. The country’s GDP is forecast to grow 6.3% in 2016, continuing a slide that began in 2010.

A brighter spot is the U.S. economy, which has been a driving positive force in the worldwide economy. Though U.S. GDP is expected to grow 2.5% this year, IC Insights points to an improving employment picture and the low price of oil as factors that may positively affect the local economy in 2016.

The researcher points to some other key trends to watch in 2016:

  • Global semiconductor sales decreased 1% in 2015 but are forecast to grow 4% in 2016.  IC Insights expects the worldwide IC market to increase 4% in 2016, and sales of optoelectronics, sensors, and discrete (OSD) devices collectively to register 5% growth.
  • Total semiconductor unit shipments (including IC and OSD devices) reached almost 840-billion units in 2015 and are expected to exceed one trillion units in 2018.  
  • A stable IC pricing environment is expected through 2020 due in part to fewer suppliers in various IC markets (i.e., DRAM, MPU, etc.), lower capital spending as a percent of sales, and no significant new IC manufacturers entering the market in the future.
  •  Semiconductor industry capital spending grew to $65.9 billion in 2015.  IC Insights forecasts semiconductor capital spending will decrease 1% in 2016.  Spending on flash memory and within the foundry segment is forecast to increase in 2016 but spending for all other market segments, including DRAM, is expected to decline.

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