IC Insights, a semiconductor market research firm, said on Friday it has lowered its growth forecast for the global integrated circuit (IC) market by 1 percentage point in light of the slowdown in the global economy.
In a report, IC Insights also said that after several major economies reported disappointing economic data for the first quarter of the year, it has cut its forecast for world GDP growth for this year to 3 percent from 3.1 percent.
Following the downgrade, IC Insights said it expects the world’s semiconductor market to grow 5 percent this year, 1 percentage point lower than an earlier estimate of a 6 percent increase.
IC Insights said the global IC market’s growth has shown a strong correlation with the world’s economic growth in the past few years, and believes such a correlation will continue this year.
The US, the world’s largest economy, reported a revised 2.4 percent increase in GDP for the first quarter, down from a 2.5 percent rise in a preliminary reading.
The US is one of the world’s largest markets for consumer electronics.
China, the world’s second-largest economy, which serves as one of the major buyers of smartphone chips, registered 7.7 percent GDP growth for the first quarter, lower than the market’s estimate of between 7.9 percent and 8 percent.
According to IC Insights, the US and China are expected to account for more than 32 percent of global GDP, estimated at US$62.05 trillion.
IC Insights said the global IC market for the second half of this year is set to grow 8.8 percent from the first half, an increase that is lower than an average of 9.2 percent growth recorded in the past 22 years.
The second half of the year is the traditional peak season for the semiconductor sector.
However, the expected 8.8 percent growth will still top the 3.6 percent increase recorded last year, the firm said.