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Worldwide semiconductor revenue is forecast to total $411.1 billion in 2017, an increase of 19.7% from 2016, according to Gartner Inc. This represents the strongest growth since the 2010 recovery from the financial crisis when revenue increased by 31.8%.
"Memory continues to lead the semiconductor market higher and is expected to increase 57% in 2017 as supply and demand dynamics increase prices. A shortage of memory, and in particular DRAM, is driving semiconductor revenue higher," said Jon Erensen, research director at Gartner. "Strength is spreading to other semiconductor categories as well with nonoptical sensors, analog, discretes and image sensors all forecast to grow over 10% in 2017.
"Higher memory costs and component shortages are cause for concern as we enter the fourth quarter," said Mr. Erensen. "Memory is driving the bill-of-materials cost higher across electronic equipment categories and we are starting to see increased costs get passed on by OEMs through higher pricing."
The semiconductor market is expected to increase 4% in 2018 and reach $427.4 billion. Gartner forecasts the market to decline 1% in 2019 as the memory market turns with leading vendors adding new supply.
Gartner clients can learn more about the outlook for the semiconductor market in "Semiconductor Forecast Database, Worldwide, 3Q17 Update."
Gartner, Inc. is the world's leading research and advisory company. The company helps business leaders across all major functions in every industry and enterprise size with the objective insights they need to make the right decisions. Gartner's comprehensive suite of services delivers strategic advice and proven best practices to help clients succeed in their mission-critical priorities. Gartner is headquartered in Stamford, Connecticut, U.S.A., and has more than 13,000 associates serving clients in 11,000 enterprises in 100 countries.