Worldwide semiconductor capital spending is projected to decline 2% in 2016, to $62.8 billion, according to Gartner. In the previous quarter, Gartner estimated 4.7% decline in the sector.
“While the first quarter 2016 forecast has improved from a projected decline of 4.7% in the previous quarter’s forecast, the 2% decline in the market for 2016 is still bleak,” said David Christensen, senior research analyst at Gartner.
Excess inventory, weak demand for PCs, tablets, and mobile products are the reasons attributed to plague the semiconductor industry. “The slowdown in the devices market has driven semiconductor producers to be conservative with their capital spending plans,” said Mr. Christensen. “This year, leading semiconductor manufacturers are responding to anticipated weak demand from semiconductors and preparing for new growth in leading-edge technologies in 2017.”
Chinese Government is focusing on improving the semiconductor manufacturing capability, which according to Gartner, will make a serious impact on the worldwide industry.
Meanwhile, Gartner predicts the market to return to growth in 2017. Increased demand for 10 nanometers (nm) and 3D NAND process development in memory and logic/foundry will drive overall spending to grow 4.4% in 2017, said Gartner.