Analyst sees another flattish year for ICs in 2012

SAN FRANCISCO—Semiconductor revenue is forecast to grow by zero to 4 percent in 2012, after likely growing about 1 to 2 percent in 2011, according to a Wall Street analyst.

"We maintain our positive stance on semis, with the vision that the recovery will be more of a 2H12 story led by a trough in 1Q12, with depleted inventories thereafter setting up for semi growth in 2H12 that should outpace end markets," said CJ Muse, an analyst with Barclays Capital, in a report circulated Tuesday (Jan. 3).

Muse said his firm's estimate of flat to 4 percent sequential growth for the semiconductor industry in 2012 is in line with to slightly lower than expected worldwide GDP growth.

Barclays' forecast for chip growth is slightly lower than the firm's previous forecast for 2012, which called for growth of 2 to 5 percent for the year. Muse said. According to Muse, the downward revision was made to reflect the ongoing inventory adjustment lasting into the first quarter of 2012 and estimated worldwide GDP growth of 3.3 percent expected for the year.

Muse's forecast for chip industry growth in 2012 is consistent with what large market research firms have said in recent weeks. Late last year, Gartner Inc. forecast that semiconductor revenue would grow 2.2 percent in 2012 after growing about 1 percent in 2011. In November, IHS iSuppli said it expects semiconductor sales to grow 3.2 percent in 2011.

Muse said Barclays' analysts continue to expect that sales of front end wafer equipment will decline 5 percent in 2012.

Analyst sees another flattish year for ICs in 2012