Global semi-conductor sales to decline in 2015: Gartner

Worldwide semi-conductor revenue is forecast at $337.8 billion in 2015, a decline of 0.8 percent from 2014, IT research and advisory company Gartner said here on Saturday.

This is the first decline in revenue since 2012 when the market fell 2.6 percent. This forecast is down from the previous quarter's forecast of 2.2 percent growth, it added.

Global economic headwinds, such as the slowing Chinese economy and the strong dollar, are pushing up the cost of electronic equipment in regions including Western Europe and Japan. This is leading to a reduction in outright sales and also encouraging buyers to shift to lower-cost equipment in these markets.

"Once again the outlook for the major applications that drive the semi-conductor market, including PCs, smartphones and tablets, has been revised downward," Andrew Norwood, research vice-president at Gartner said.

"This, combined with the continuing impact of the strong dollar on demand in key markets outside of the US, has resulted in a decline in our forecast and a negative growth rate for 2015," he added.

"Not only did the year start badly, but we are not seeing the typical ramp up in sales of semi-conductors in many areas of the market in anticipation of the holiday season," Norwood added.

"As a result, sales are not going to recover enough in the second half to halt an annual decline in semi-conductor revenue for 2015," he said.

Gartner predicts a more positive outlook for 2016 and is forecasting semi-conductor revenue will increase 1.9 percent to $344.1 billion.