The weak global economy and poor DRAM market conditions have prompted IC Insights to lower its semiconductor market growth forecast for 2016 to negative 1%, according to the market research firm.

The health of the semiconductor industry is increasingly tied to the health of the worldwide economy, said IC Insights. Rarely can there be strong semiconductor market growth without at least "good" worldwide economic growth to support it. Consequently, IC Insights expects annual global semiconductor market growth rates to continue to closely track the performance of worldwide GDP growth.

In many areas of the world, local economies have slowed, IC Insights indicated. China, which is the leading market for PCs, digital TVs, smartphones, new commercial aircraft and automobiles, is forecast to continue to lose economic momentum in 2016. China's GDP is forecast to increase 6.6% in 2016, which continues a slide in that country's annual GDP growth rate that started in 2010 when growth rates exceeded 10%, IC Insights said.

IC Insights also believes that the worldwide economy will be negatively impacted, at least over the next year or two, by the Brexit vote.

The other major "culprit" dragging down semiconductor industry growth in 2016 is the very weak DRAM market, IC Insights noted. At US$45.0 billion, the DRAM market was the largest single product category in the semiconductor industry in 2015. IC Insights forecasts that the DRAM market will register a 19% fall to US$36.5 billion in 2016. The DRAM market alone is forecast to shave 3pp off of total semiconductor market growth in 2016.

Semiconductor market growth excluding DRAM could reach 2% in 2016, IC Insights added.