Projected GDP Growth Bodes Well for Semiconductor Sales

Thursday, May 22, 2014, 11:00am

by Semiconductor Industry Association

In its most recent World Economic Outlook published last month, the International Monetary Fund (IMF) forecasts global GDP growth of 3.6 percent in 2014 and 3.9 percent in 2015. Global GDP growth in 2013 was 3.0 percent.

IMF’s projection of year-on-year positive GDP growth in 2014 and 2015 is an encouraging sign for global semiconductor sales growth. As semiconductors increasingly pervade virtually all aspects of our lives and our world, semiconductor sales performance has become increasingly tied to global GDP performance. An improved global macroeconomic environment in 2014 and 2015, as reflected in growth in global GDP, is likely to have a positive effect on semiconductor sales.

While it is difficult to forecast semiconductor sales performance, according to the World Semiconductor Trade Statistics (WSTS) program, global semiconductor sales are forecast to grow by 4.1 percent in 2014 ($316.6 billion in total sales) and 3.4 percent in 2015 ($327.3 billion). Also, according to industry market research firm IC Insights, growth in integrated circuits, which represent over 80 percent of semiconductor sales, is highly correlated with worldwide GDP growth. In fact, IC Insights has calculated that a global GDP growth rate between 3.0 to 3.6 percent would translate into annual IC growth of 5 to 9 percent.

Despite a slow recovery, the global economy seems to be finally moving in the right direction. This is welcome news to the global semiconductor industry.