Chip market brightens in 2017

Wall Streeter predicts return to 5 percent growth. Most will happen in 1H17.

A veteran Wall Street analyst projects the semiconductor industry will snap back to typical growth levels in 2017 after a slight contraction the previous year. Other market watchers also see a better year ahead, after projecting a flat or slight uptick in 2016 based on a bump in PC and memory demand.

The chip sector could expand by 5 percent in 2017 after shrinking about 1 percent in 2016, wrote Ross Seymore of Deutsche Bank in a new report. The data center will be the fastest growth segment, rising 10 percent, followed by automotive at 9 percent and communications at 7 percent.

PCs will be the big drag on 2017, declining 2 percent, with consumer and industrial markets growing at about 4 percent in line with the overall industry, according to Seymore's estimate, with possible upside from emerging markets in drones and virtual reality. Most of the growth will come in the first half of 2017, Seymore said.

The latest projections from the World Semiconductor Trade Statistics are more moderate. The group projects 2016 nearly flat at sales of $334.953 billion, down just 0.06 percent from 2015. It anticipates sales in 2017 and 2018 to be up 3.3 and 2.3 percent, respectively.

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