Weak PC sales slow semiconductor market
Windows 8 shoulders part of the blame for the market's 2.2 per cent contraction in 2012, according to IDC
Weak sales of PCs, mobile phones and digital televisions (DTVs) have led to declining revenue in the worldwide semiconductor market, according to IDC.
In its Semiconductor Application Forecaster (SAF), IDC claims that in 2012 semiconductor revenue fell 2.2 per cent annually to $295bn (£195bn) due to the slow sales, as well as ongoing economic issues in Europe.
Once again, the "lacklustre launch" of Windows 8 took some of the blame, as well as a slowdown in the Chinese market, which IDC said contributed to the lower demand.
Eight out of the top 10 semiconductor firms saw a revenue dip last year, as well as most of the other 110 companies analysed by IDC. Only 17 companies with revenues over $1bn grew by more than five per cent. Of the top 25 semiconductor firms, Apple, Sharp Electronics and NVIDIA were among the few which saw positive top-line growth.
Semiconductor top dog Intel's revenue fell three per cent annually to $50bn due to weak PC demand and low traction in tablets and smartphones, claims IDC.
Weak DTV demand and volatile memory pricing saw revenue at Samsung – the second-largest semiconductor supplier – drop six per cent annually in 2012.
Michael Palma, research manager of semiconductors at IDC, claimed the market slowdown is leading companies to become more focused.
He said: "Beyond the slowdown in end-market demand, the challenge for semiconductor companies is to zero in on their key value propositions.
"Whether that is in modem or connectivity technologies, sensors, mixed-signal processing, or power management, there are areas of the market showing strong potential. However, competing in crowded segments with little differentiation has contributed to the slowdown in semiconductor revenue.
"Large vendors have been going through a process of narrowing their product portfolios to focus resources on profitable lines where their IP and experience provide an edge in the market."