It predicts sales will hit $348 billion, which is only 2.2 percent up over the 2014 figure.
Gartner had predicted four percent growth but the figures have been skewed by a strong US dollar in key markets.
Jon Erensen, a research director at the market research company, said that there’s usually a second quarter “bounce” in sales, but that hasn’t happened this year.
He said that it now is “dependent on a strong third quarter rebound, driven by Windows 10 and the ramp up to the holiday season”.
But it’s not good news for Intel – the PC segment is showing the greatest decline, with production units down by 8.7 percent for the year. He said inventory in the PC market is high. “Any issues with the launches of Windows 10 or [Intel] Skylake in the third quarter of 2015… could lead to further decline.”
It’s smartphones and solid state drives (SSDs) which are driving semiconductor growth, he said.
The much hyped wearables market – which includes “smart watches” – will only represent one percent of total semiconductor revenues by 2019, he said.