The most beleaguered semiconductor segment will be the memory space, especially in dynamic ran- dom access memory (DRAM), with revenue projected to decline 16.1 percent in 2012 on top of a 26.8 percent fall in 2011. And a once-energetic performer in 2011—NAND flash—will see less rosy prospects this year because of additional capacity coming on to meet a surge of demand for the memory in devices like mobile handsets and media tablets.
In contrast, a strong market revenue driver this year will be the wireless communication segment, spurred by media tablets, smartphones and industrial electronics. For the semiconductor industry to revi- talize, however, it is imperative that the core PC and peripheral markets experience a significant increase in demand, IHS believes.
The first half of 2012 is almost certain to be a challenge for the industry, with negative growth being forecast for the historically slow first-quarter season. The industry will begin to rebound in the second quarter and then go on to a strong third quarter, as is normal for the trade.
Foundries dedicated to manufacturing semiconductors as their main activity will continue to outper- form the industry, while IDMs will have lower growth, especially as they have abdicated manufacturing in leading-edge technology—where the high margins are—to the foundries. The advice is for IDMs not to sit by idly and allow fabless or foundry companies to control leading-edge design or production on their own. Otherwise, they risk consolidation, which would have the unintended effect of providing rival foundries with even more opportunities for additional growth.
The tepid expansion of the semiconductor industry this year equals the positive but unremarkable increase projected in semiconducto r -related spending for 2012, expected to climb 3 percent from $240.6 billion in 2011.
