In my last blog here, I talked about last 30+ years of semiconductor IC market. While we have seen this market growing at CAGR of ~9% over last 30+ years, the CAGR of current decade is expected to be at just ~4%. Although the base size of the overall semiconductor IC market is quite healthy, expected to be at ~$378B by 2019, we cannot hope for high growth rate from here. My belief about this proposition becomes stronger when I see a detailed report about the growth of major product categories in IC market, published by IC Insights here.
This report shows that IC market growth in 2015 will be a tad below at 7% compared to 8% in 2014. And only 11 product categories out of 33 will show growth rate higher than the 7% average of total IC market. This is less of a worry than what is being revealed when I look at the relative growth of individual product categories between 2014 and 2015.
True, there is growth seen in automotive ICs, 32-bit MCUs that support driver information system and semi-autonomous driving system, and NAND Flash that support mobile systems. However, look at their growth rate figures in 2015 compared to 2014; they are just about 1 to 3%. Whereas there are others that are staying above average 7% growth rate of total IC market, but their growth rates in 2015 have declined significantly compared to 2014. DRAM growth has declined from 33% to 14%, Power Management Analog growth has declined from 16% to 8%, and Amplifiers/Comparators growth has declined from 11% to 7%.
If we look at the line below 7%, we see similar situation. Tablet MPU growth has declined from 9% to just 3%, Industrial Special Purpose Logic growth has declined from 10% to 5%. We do not see growth of any category rising except 16-bit MCU and Wired Communication.
An interesting inference from the data at the end of the table, where product categories with de-growth are projected, is that they are improving; improving in the sense that their de-growth numbers have reduced although they are still in negative. Only Wired Communication – Application Specific Analog has dramatically recovered from -30% to 2%.
Looking at these figures, I think we are going to see ~5% CAGR in future, 5-10% in good times, 0-5% or even negative in bad times. It may be open to debate as we have not seen the IoT market yet. Automotive market is supposed to be the leading one in terms of percentage growth; the initial numbers of automotive ICs in 2014 and 2015 are here to see!
Can we say the IoT market will bring high growth rate of more than 10% CAGR? I do not think so. IoT itself will grow at a rate of ~22%, but that may take a decade to become a critical mass in itself to become a deciding factor. The semiconductor market with the reference of IoT can be better discussed after this decade. Comments welcome!Share this post via: