Worldwide semiconductor revenues are forecast to reach US$358 billion in 2015, a 5.4% increase from 2014, according to Gartner. The forecast is down from the research firm's previous estimate of 5.8% growth that was given in the fourth quarter of 2014.

"Semiconductor revenue growth in 2015 is expected to slow from the 7.9% growth experienced in 2014 as DRAM returns to more traditional price reductions and the industry burns off excess holiday inventory," said Jon Erensen, research director of Gartner. "DRAM pricing was unusually firm in 2014 due to short supply, which propelled DRAM to be the fastest-growing device type in 2014 with 31.7% revenue growth. DRAM supply and demand will be in line in 2015, driving bit pricing down a more traditional 16.8% and reducing annual DRAM revenue growth to 7.7%."

From an application point of view, smartphones, SSDs and ultramobiles will see the largest dollar increases, Gartner said. In 2015, compute applications will continue to be the largest market for semiconductors, followed by wireless and consumer applications. Combined, these three device categories represent more than two-thirds of total semiconductor revenues and have the most influence on the overall strength of the semiconductor market.

However, in 2015, the industrial electronics segment is expected to outperform overall semiconductor market growth and other electronic application categories with revenue growth of 9.1%, Gartner noted. The growth will be driven mainly by LED lighting applications for industrial and residential purposes and smart city projects. In addition, the Internet of Things (IoT) will continue to drive very strong unit growth in 2015 and beyond.

Following industrial applications, wireless applications - driven mainly by mobile phones - will be the next biggest growth market for semiconductors in 2015, Gartner indicated. However, the 2015 revenue growth forecast for wireless applications, and specifically mobile phones, remains the same as the previous quarter's forecast, Gartner said.

"While mobile phone semiconductor sales will remain robust, driven by the accelerating shift to smartphones and 4G Long Term Evolution, there is concern that weak sell-through for other electronic equipment categories will result in higher inventory levels and drag down semiconductor sales in the first quarter of 2015," said Erensen.