Hardware companies face some mixed news on the semiconductor front over the next few quarters, according to a new note from IDC. While the research firm expects semiconductor revenues to grow 4.6 percent in 2012, a combination of global macroeconomic uncertainties continues to loom large.
“The cyclical semiconductor downturn that started in the middle of last year reached bottom in the second quarter of 2012,” Mali Venkatesan, research manager for semiconductors at IDC, wrote in a July 19 statement accompanying the data. As a result, “foundries are bringing more capacity online,” which in turn is easing the supply constraints on semiconductor products.
“Also, the semiconductor industry has recovered from the flooding in Thailand that held back the supply of hard drives and PCs,” Venkatesan added. “Leading-edge 22nm at Intel is ramping fast now, while foundries and memory companies are getting ready to move to 2nm technology mode.”
IDC believes that a slate of upcoming technologies, including Windows 8-powered devices, will further spur semiconductor demand. It predicts semiconductor revenues for the computing industry will grow 1.5 percent year-over-year for 2012, with a compound annual growth rate (CAGR) of 3.7 percent for the 2011-2016 period. Media tablets, e-readers, LED/LCD television sets, and HD receivers will enjoy average growth.
From the processor-maker perspective, however, the economic view is somewhat more mixed. When Intel offered up its Q3 2012 earnings results earlier this week, it reported the data center as an area of particular strength; that segment grew 14 percent sequentially, to $2.8 billion, while its PC Client Group and other Intel architecture groups reported 3 percent sequential growth.
“As we enter the third quarter, our growth will be slower than we anticipated due to a more challenging macroeconomic environment,” Paul Otellini, Intel president and CEO, wrote in a July 17 statement accompanying the results. “With a rich mix of Ultrabook and Intel-based tablet and phone introductions in the second half, combined with the long-term investments we’re making in our product and manufacturing areas, we are well positioned for this year and beyond.”
Despite some tightness in operating budgets, companies are still reserving funds for data centers. A recent survey of 2,000 company owners, IT vendors, consultants and users by research firm The 451 Group featured 55 percent of respondents indicating a data center budget increase in 2012. That was a slight uptick from 2011, when 52 percent of respondents reported a rise in their data-center budget over 2010.
That continuing interest in data center provisioning could help Intel and other companies as they seek to navigate some rocky economic waters.