Chips face tough 2016

63-CH3SNAS_DRAMHot on the heels of news that TSMC has cut its plans to buy as much manufacturing equipment as it needed, a market research company based in Taiwan is predicting a tough time for optoelectronic and semiconductor companies in 2016.

Trendforce said weak demand was slowing down DRAM prices, coupled with a glut of memory chips. It estimates PC DRAM prices have fallen close to 40 percent this year and the server DRAM market will show steep declines during the second half of this year.

And while demand for NAND flash memory has been strong, but Trendforce is predicting that demand in 2016 will be conservative.

On the optoelectronic side, Trendforce thinks that the market for high brightness LED products will only grow by two percent in 2015, creating the right conditions for industry consolidation.

Average selling prices for this category of LED products has dropped by 30 to 40 percent during 2015, because of oversupply.

On the photovoltaic solar panel front, the outlook is better with demand to grow by nearly 10 percent in 2016. But there’s oversupply of PV too, which is expected to drive down prices considerably during the course of next year.