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April 23, 2015

Why semiconductor market needs to wait for Windows 10 and Intel Skylake in 2015

Gartner predicts $354bn in sales this year.

By CBR Staff Writer

This year’s Q2 will be the critical season for the PC and ultramobile semiconductor market this year, with launch of Windows 10 and Intel’s Skylake products.

In a market forecast analyst Gartner said it expects growth in semiconductor market to decline by 5.4% from the previous quarter, but increase by 4% to $354bn from 2014.

The growth will be slowed by currency shifts, excess inventory and an end to the PC upgrade cycle.

System suppliers are expected to increase prices in Europe to keep their margins high due to a strong dollar, while buyers will cut down their purchases by extending product life cycles and buying down the price curve.

The demand for PC replacements due to the end of support for Windows XP, which drove sales in 2014, will not be witnessed this year as consumers delay migrating to Windows 10.

The 2015 market will be driven by smartphones, solid-state drives and ultramobiles, while the traditional PC segment will experience the greatest decline.

Gartner research vice-president Bryan Lewis said: "2015 semiconductor growth hinges on the strength of the second-quarter bounce.

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"The second quarter is traditionally where we see strong sequential growth coming off the traditionally negative first quarter as inventory is burned off from the holidays.

"First quarter 2015 looks to have the worst sequential growth since 2009 with at least a 7 percent decline, so a strong second-quarter bounce is needed to achieve the 4 percent annual growth predicted for 2015."

DRAM (dynamic random-access memory) will continue to be one of the main growth drivers of the industry.

Gartner expects DRAM revenue to increase by 7.9% this year, but decline by 20.2% and 8.4% in 2016 and 2017 respectively.

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