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Semiconductor Spending Forecast To Decline Amid Weak PC, Tablet, Mobile Demand

Worldwide semiconductor capital spending is projected to decline 2 per cent this year, according to Gartner, amid weak demand for PCs, tablets and mobile products.

Gartner’s forecast total of US$62.8 billion for the year, however, represents a rise from an estimated 4.7 per cent decline in its previous quarterly forecast.

“While the first quarter 2016 forecast has improved from a projected decline of 4.7 per cent in the previous quarter’s forecast, the 2 per cent decline in the market for 2016 is still bleak,” David Christensen, Gartner senior research analyst, commented.

“Excess inventory and weak demand for PCs, tablets and mobile products continue to plague the semiconductor industry, resulting in a slow growth rate that began in late 2015 and is continuing into 2016.”

Gartner expects a return to growth in 2017, forecasting spending of US$65.53 billion, growth of 4.4 per cent, and further growth in 2018, forecasting spending of US$70.01 billion, growth of 6.8 per cent.

“The slowdown in the devices market has driven semiconductor producers to be conservative with their capital spending plans,” Christensen stated.

“This year, leading semiconductor manufacturers are responding to anticipated weak demand from semiconductors and preparing for new growth in leading-edge technologies in 2017.”

Gartner additionally notes that “aggressive pursuit of semiconductor manufacturing capability by the Chinese government is an issue that cannot be ignored by the semiconductor manufacturing industry” amid a number of developments in the market over the last year.

“This will dramatically affect the competitive landscape of global semiconductor manufacturing in the next few years, as China is now a major market for semiconductor usage and manufacturing,” Gartner states.

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