Semicon industry to bounce back in 2017

Revenue slipped by 2 percent in 2015, but IHS projects the sector will get back on track in 2017.

The semiconductor industry saw $347.3 billion in revenue in 2015, a 2 percent decline from the previous year, according to a new report from IHS. It is projected to dip another 2.2 percent in 2016 before turning around in 2017.

As is usually the case in markets in decline, there has been increased consolidation among semiconductor companies. This has been good news for the big brands as average revenue for the top 25 companies has grown over the last 15 years, especially for those in the top 10. For others, it has largely remained stagnant. Though not the ideal situation, it's certainly better than falling revenue. The other perk of consolidation is that gross and operating margins have improved since 2007. These signals suggest the market has been relatively buoyant in the 2000s.

Market turmoil also led to a bit of a shakeup among company rankings. Intel maintained its top spot, thanks to its acquisition of Altera, but Qualcomm fell to fourth place, with Samsung and SK Hynix in-between. Among the 285 companies IHS analyzed, less than 42 percent have positive results in 2015, according to the report.

There are still good days ahead, of course. Growth will return in 2017, although IHS projects a CAGR of just 2.1 percent between 2015 and 2020. In 2020 to 2022, however, new products are expected to hit the market that will spur "significant growth in the semiconductor market."

See a comparison table of selected PCB assembly suppliers on GlobalSources.com