Smartphones are weakening the Internet of Things and wearable hard to drive semiconductor growth

The PC market continued to slump in 2015. The growth of smartphones with strong growth in the past two years has also seen a slowdown. As the main driving force for global semiconductor growth, the PC and smartphone market has weakened. Can the emerging Internet of Things and wearables become the new driving force in the semiconductor industry?   

Last Wednesday, the market regulator Gartner revised its global semiconductor industry output forecast this year, and its growth rate was reduced from 4% to 2.2%. It is estimated that the total global semiconductor revenue will reach 348 billion US dollars in 2015. The main reason for the growth rate of this revision is that "all kinds of products, including PCs, smart phones and tablet devices, which are the main driving factors in the semiconductor market, all have their sales reduced. This situation coupled with the strong trend of the US dollar against the main The impact of market demand ultimately led to a decline in semiconductor revenues in 2015 compared to the original," said John Erensen, research director at Gartner. In the past, the common second-quarter rebound situation did not appear this year. The result is that the semiconductor industry can only hope for a relatively lagging third-quarter rebound possibility.

Smartphones are getting weaker, IoT and wearable are hard to drive semiconductor growth

Specifically, PC is one of the biggest contributors to chip demand. Gartner predicts that PC will continue to decline by 3%, and sales may fall below 300 million units. AMD, the US processor giant, slashed its earnings after the US stock market on Monday, due to poor PC demand. The traditional PC business sector will experience the largest shrinkage in history, and its unit output will decrease by 8.7% in 2015, which is slightly lower than the forecast for the previous quarter. "At present, the inventory rate in the PC market is still high, and manufacturers can only pin their hopes on the supply chain boost effect caused by the release of Windows 10 or Intel Skylake architecture. Windows 10 and Skylake will become the third quarter of 2015. Opportunities for increased PC sales, but once the problem occurs, the shrinking situation will only further increase," Erensen explained.

Smartphones and Solid State Drives (SSDs) will continue to be the main driver of the semiconductor market. Apple's iPhone remains the biggest bright spot in the market, with strong growth in shipments and rising average selling prices. The performance of high-end Android smartphones is flat, and the weakening of China's smartphone market will continue to affect its growth. In the memory industry, DRAM remains the main driver of growth for the entire semiconductor industry. DRAM revenue is expected to grow by 3.8% in 2015, compared to 32% in 2014.

In addition, Gartner also expects tablet sales this year to decline by 5.3% to 214 million units. Chipworks such as Skyworks SoluTIons, Avago Technologies Limited, and NXP Semiconductors all fell more than 4% today.

Through Gartner's market analysis, you can clearly understand the actual situation of PCs and smartphones, which are the main growth kinetic energy of global semiconductors in 2015. Then, can you still get the sought-after IoT, wearable devices and even drones and robots? Become a new growth kinetic energy in the semiconductor industry.

The role of the Internet of Things for the entire semiconductor industry, Jiang Shangyi, the chairman of TSMC, the world's largest foundry company, said that in the face of the rise of the Internet of Things, the prospects of semiconductors are not all about the Internet of Things, because IoT products are mainly concentrated in people's livelihood products, technology. Level requirements are not too high. The main products driving semiconductor development, from the earliest computers, smartphones after 2010, but the Internet of Things will not play such a big driving force, must be like CPU (central processing unit) products, applications in the cloud, data Centers and smart cars and other fields.

There are also hot wearable devices, Gartner analysts believe that including smart watches, head-mounted displays (HMD), smart glasses and Bluetooth headsets, etc., showing a trend of rising, but the revenue brought by wearable products - Including processing, sensing and communication chips - by 2019, it will only account for 1% of total semiconductor revenue. In the short term, smart watches will become the most powerful semiconductor sales force.

According to a new report released by ABI Research, the overall market for commercial drones will be "more than $8.4 billion in 2018." By 2019, commercial drones will dominate, "sales revenue will exceed $5.1 billion ( 51% of the compound growth rate from 2014 to 2019) is about 5 times that of the hobby market and 2.3 times that of the military/civilian market.” With the gradual improvement of the drone, it carries a series of electronic devices, including MEMS sensors. (accelerometers, gyroscopes, magnetometers and pressure sensors), cameras and cameras, antennas, GPS modules, powerful processors, a range of digital radio communication equipment, etc., so the explosion of drones may also drive semiconductor growth a driving force.

Although from now on, the development of the global semiconductor industry still depends on the promotion of PCs and smart phones. Whether it is the Internet of Things, wearable or drone market, there is still a long way to go to really promote the growth of the semiconductor industry. However, if we can combine emerging industries with the PC industry, can we promote the development of the semiconductor industry more favorablely?

Virtual Reality As a hot area of ​​current wearables, Oculus VR has produced a virtual reality headset game called Oculus Rift that immerses people in the virtual world. "User input", followed by "USB cable from Rift to the computer to send instructions", this is the first two steps of the Oculus Rift virtual reality device work, and Oculus Rift specified adapter PC device graphics card to reach GTX 970/AMD 290 or Above the level, this means that the market will have more and more demand for high-end graphics cards, and at the same time, high prices will bring more profits to PC manufacturers.

Oculus Rift compliant PC device graphics card to reach GTX 970/AMD 290 or above

Oculus Rift compliant PC device graphics card to reach GTX 970/AMD 290 or above

This seems to be a very good solution to promote semiconductor growth. However, although the Oculus Rift breaks the current lack of innovation in the PC industry, in order to save costs, many PC manufacturers will adopt the public model, and the homogenization from the inside out again. Let consumers feel tired, and if the passion fades, the PC market will be back to the original shape. At the same time, given the popularity of virtual reality, it will take time for the Oculus Rift to break away from the cable. It will not be good news for PC manufacturers, so this model needs to be considered for the growth of the industry.

Intel's Edison chip for wearables

Intel's Edison chip for wearables

The main driving force for driving the growth of the semiconductor industry is the weakening of PCs and smartphones. The Internet of Things and wearables are also difficult to promote semiconductor growth. The combination of new and old industries such as PC and virtual reality will continue to test the development of the industry. Therefore, the entire semiconductor industry is presented in 2015. A situation in which growth is weak.

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