Moving into the second quarter (2Q15), there's good reason to continue the optimism for 2015 growth, and impressively, that outlook covers a wide swath of chip markets, as confirmed by leading industry and data analysts. The World Semiconductor Trade Statistics (WSTS) released today their final 2014 market figures confirming the growth of 9.9% for the year over 2013, and expectations for continued growth in 2015 and 2016.
Growth momentum continues
It's certainly nice when the same news is good news. That's what we've been seeing this week as the end of 2Q15 brings a final close to the 2014 data books and irons out any lingering questions regarding 2015 forecasts based on those 2014 data. As WSTS underscored, last year's strong growth reaching US $336 billion was the result of major chip market growth, particularly the strength in "Memory (18.2%), Discretes (10.8%) and Analog (10.6%)." But product categories were only part of the picture, the worldwide market strengthened across regions in 2014, showing a real sustainable growth pattern and emergence from previous cautionary periods post-recession.
While last year's strong growth is not expected to continue at the same, nearly double-digit pace, "WSTS anticipates the world semiconductor market to grow 4.9% to US$352 billion in 2015. For 2016, the market is forecasted to be US$363 billion, up 3.1%."
IC markets underscore breadth of growth
Also today, IC Insights released its March Update exploring 33 major IC product categories' growth forecasts. The drilldown underscores and confirms the WSTS findings, highlighting Logic, DRAM, and Analog devices, but further pulling out that the logic and analog categories are particularly solid for automotive-specific ICs. As the report update discusses, these automotive-specific applications are driven by the increase in smart cars:
"intelligent" cars [that] are contributing to growth in the 32-bit MCU market. Driver information systems, throttle control, and semi-autonomous driving features such as self-parking, advanced cruise control and collision-avoidance are some of the systems that rely on 32-bit MCUs. In the next few years, complex 32-bit MCUs are expected to account for over 25% of the processing power in vehicles.
The forecast across the board from within semi as well as from the automotive industry support continued strong CAGR for automotive over the next five-year period. IC Insights forecasts automotive to growth at a CAGR of 6.5% from 2014-2019 "[…] compared to projected CAGRs of 6.8% for communications, 4.3% for consumer, 4.2% for computer, 4.5% for industrial, and 2.7% for government/military."
According to IC Insights, the automotive DRAM growth and the rise in ASP was behind the 2014 and current increases. While this year's forecast is for DRAM pricing to stabilize and plateau, the demand will continue particularly for mobile DRAM followed by growth for mobile (cellphone) application MPUs, while tablet MPUs are likely to decline. However, the wider industry outlook for mobile devices, including tablets, is for strong growth that will drive those components, especially NAND flash and power management analog chips to higher level growth this year (in the 8-9% ranges).
Recent news from Intel confirms that while enterprise PCs had been seeing some rebound, the thrust of demand is the shift toward enterprise tablets. As DigiTimes reported, Micron, for example, is increasing its NAND flash fab facility in Singapore to incrementally increase production in response to market conditions for 3D NAND flash.