Gartner lowers estimate for chip market in 2019

July 23, 2019 //By Peter Clarke
Gartner lowers estimate for chip market in 2019
The global demand for semiconductors is set to total $429 billion in 2019, a decline of 9.6 percent from $475 billion in 2018, according to Gartner Inc.

In the previous quarter Gartner predicted a fall of 3.4 percent. However, IC Insights predicts a steep fall in 2019 from a higher starting point IC Insights predicts the worldwide semiconductor market willdrop by 12 percent this year to $443.8 billion after exceeding the $500 billion level for the first time in 2018 (see Electronic systems' semiconductor content will drop ).

The drop is being driven by a weaker environment for memory and some other chips plus inhibition of the market due to US-China trade tension. Gartner predicts DRAM pricing will decline by 42.1 percent in 2019.

Gartner expects the DRAM oversupply to extend through 2Q20. The global NAND flash memory market has been in oversupply since the 1Q18 and is now more pronounced because of near-term demand weakness.

U.S.-imposed restrictions on China will have a longer-term impact on semiconductor supply and demand but will also serve to accelerate China's domestic semiconductor production. It will also drive the production of local forks of such things as ARM processors, Gartner said.

“We expect that high smartphone inventory and sluggish solid-state array demand will last for a few more quarters,” said Ben Lee, senior analyst, in a statement. "Given the aggressive price declines for NAND, it is possible to see a more balanced supply/demand outlook in 2020. However, looking further out is concerning given slowing demand drivers, such as PCs and smartphones, and more capacity as new fabs in China impact the market."

Related links and articles:

www.gartner.com

News articles:

Gartner revises down view of 2018 global chip market

Electronic systems' semiconductor content will drop

DRAM capex to drop in 2019 amid pricing weakness


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