Windows 8, Tablets Driving Growth for Chip Industry in 2012

Growing demand for communications semiconductors is bailing out the chip industry from a potentially catastrophic 2012. IDC said that it expects global chip sales to climb by 4.6 percent to $315 million.

The research firm projects negative growth for memory makers and just 1.5 percent growth for the computer industry overall, which is largely driven by the introduction of Windows 8. However, there are bright spots, such as semiconductors for mobile PCs, which are forecast to gain 5.9 percent year over year.

"As we forecasted earlier this year, the cyclical semiconductor downturn that started in the middle of last year reached bottom in the second quarter of 2012," said Mali Venkatesan, research manager for Semiconductors at IDC. "Supply constraints on semiconductor products, such as smartphone applications processors and PC discrete graphics processors, based on the most advanced process technologies are easing as foundries are bringing more capacity online."

Conclusively, the biggest opportunities appear to be in the communications and automotive segments. IDC estimates that the Communications industry segment will grow 7.2 percent year over year in 2012, while semiconductor revenues for 4G phones will experience year-over-year growth of 579 percent. Chips for the automotive will increase sales by 9.7 percent, IDC said.

Somewhat surprising may be the note that chips for media tablets, e-Readers, HD receivers, and LED/LCD TVs will grow at a much more moderate pace of 4.4 percent.

"The semiconductor industry has recovered from the flooding in Thailand that held back the supply of hard drives and PCs. Leading-edge 22nm at Intel is ramping fast now, while foundries and memory companies are getting ready to move to 20nm technology node," Venkatesan said. However, he believes that near term growth will be slower than that of past semiconductor cycles due to "macroeconomic weakness."