International research firm Gartner has said today that capital spending by semiconductor companies is expected to fall by two per cent at 62.8 billion worldwide this year. According to the research firm the dip is primarily due to low demand for PCs, tablets and mobile products. In 2015, the figure was at $64.06 billion.
However the postitive side is that in 2017, the market is expected to grow and reach capital spending of $65.52 billion.
“Excess inventory and weak demand for PCs, tablets, and mobile products continue to plague the semiconductor industry, resulting in a slow growth rate that began in late 2015 and is continuing into 2016,” said David Christensen, senior research analyst at Gartner.
Christensen further said the slowdown in the devices market has driven semiconductor producers to be conservative with their capital spending plans. “This year, leading semiconductor manufacturers are responding to anticipated weak demand from semiconductors and preparing for new growth in leading-edge technologies in 2017,” he added.
India is also vying to bring semiconductor manufacturing in the country, but as it is very capital intensive, there has hardly been any success in this front.
By Atanu Kumar Das