Chip Sales Essentially Flat in 2015

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The world’s chipmakers experienced a small dip in sales last year after a record-breaking performance in 2014.

Semiconductor revenues totaled $335.2 billion in 2015, a meager 0.2 percent decline, according to new data from the Semiconductor Industry Association (SIA). By comparison, revenues were $335.2 billion in 2014.

“Global sales for the month of December 2015 reached $27.6 billion, down 4.4 percent compared to the previous month and 5.2 percent lower than sales from December 2014. Fourth quarter sales of $82.9 billion were 5.2 percent lower than the total of $87.4 billion from the fourth quarter of 2014,” said the SIA in a report released today.

Though the declines are somewhat alarming on the surface, the industry weathered a challenging market fairly well, said John Neuffer, president and CEO of the Semiconductor Industry Association. “Despite formidable headwinds, the global semiconductor industry posted solid sales in 2015, although falling just short of the record total from 2014,” he said in a statement.

In 2016, chipmakers can expect a little bit of a turnaround.

“Factors that limited more robust sales in 2015 include softening demand, the strength of the dollar, and normal market trends and cyclicality. In spite of these challenges, modest market growth is projected for 2016,” continued Neuffer.

Faced with these hurdles, chipmakers are trimming their investments this year, predicted Gartner last month.

Semiconductor manufacturers are expected to cut capital spending by 4.7 percent in 2016 to $59.4 billion due to economic uncertainty. “Capital investment policies of leading semiconductor vendors have remained cautious against the background of sluggish electronics demand,” particularly in end-user devices, said Gartner senior analyst David Christensen, in a statement.

The logic segment of the market took home the biggest slice of the pie with a 27 percent share and $90.8 billion in sales, said the SIA. Memory came in second with $77.2 billion, followed by micro-ICs (integrated circuits), semiconductor category that includes microprocessors, with $61.3 billion.

SIA’s suggests that the Internet of Things (IoT) and the increasing popularity of flash storage are having an effect on the market.

The fastest growing segments include optoelectronics, which gained 11.3 percent last year. Other gainers include sensors and actuators ($8.8 billion, 3.7-percent increase) and NAND flash memory ($28.8 billion, 2.2-percent increase).

Brisk demand in China helped offset some of the losses experienced in other regions.

Annual sales increased by 7.7 percent in China last. Meanwhile, sales plummeted 10.7 percent in Japan and 8.5 percent across Europe. In the Americas, chipmakers saw their fortunes decline by 0.8 percent.

Pedro Hernandez is a contributing editor at Datamation. Follow him on Twitter @ecoINSITE.