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Worsening economic conditions will spur a decline in semiconductor sales this year, according to analysts.
Research firm IHS said that it now expects sales to decline by 2.3 percent this year as revenues are on track to fall by roughly $7bn. The company predicts that spending on semiconductors in 2012 will drop to $303bn, down from $310bn in 2011.
The report worsens an already pessimistic analyst outlook for the year. IHS had originally forecast a 1.7 percent dip in revenues. The decline would be the first annual dip in sales tracked by the company since 2009.
Analyst Dale Ford said that the overall market for semiconductors has been weak, with five out of the six major markets for hardware seeing a decline on the year.
"An extremely weak global economy resulted in poor demand for electronics. As a result, the semiconductor industry slipped from stagnation in the first half of 2012 to a slump in the second half," Ford said.
"Still, one of the few silver linings is that the fourth quarter is expected to bring a mild recovery in year-over-year growth, setting the stage for a market rebound in 2013."
The company predicts that 2013 will bring a strong recovery, with sales forecast to increase by 8.2 percent. The recovery will carry forward to 2015, when analysts believe that the market could grow by some 6.4 percent.