Semiconductor Revenue Will Reach $411 Billion in 2017

Worldwide semiconductor revenue is forecast to total $411.1 billion in 2017, an increase of 19.7 percent from 2016, according to Gartner. This represents the strongest growth since the 2010 recovery from the financial crisis when revenue increased by 31.8 percent.

"Memory continues to lead the semiconductor market higher and is expected to increase 57 percent 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 percent in 2017.

"Higher memory costs and component shortages are cause for concern as we enter the fourth quarter," added 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 percent in 2018 and reach $427.4 billion. Gartner forecasts the market to decline 1 percent in 2019 as the memory market turns with leading vendors adding new supply.