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We have been concerned about the near-term outlook for semiconductors since we started this website. Now, according to Electronic News, tech research firm Gartner has some longer-term concerns.

Due to five major trends, the semiconductor industry is expected go through a period of “turbulent” changes over the next 10 years, according to market researchers at Gartner Inc.

The five “megatrends” that are shaping the industry are continued integration due to Moore’s Law, increasing cost and scale of manufacturing facilities, the role the consumer markets will have going forward, service providers of various kinds, and a set of new and potentially disruptive technologies.

First, continued integration due to the onward march of Moore’s Law is one of the most familiar concepts in all of semiconductors, but at the same time, semiconductor market growth is slowing down, he reminded.

“The problem is that whilst market growth rate in the industry is slowing, costs within the industry are not. The continued integration leads to increasing complexity of devices and therefore to escalating design costs forcing companies to amortize those costs across several end users of that chip leading to more general-purpose chips,” Tully explained.

The solution to this is actually pretty simple. Moore’s law is only advancing because the semiconductor manufacturers are spending so much to push technology forward. If they make their investments at a slower pace (oh, I don’t know, in line with long-term demand growth?) the market should be fairly stable.

The other megatrends seemed to us to be fairly obvious, so we’ll skip to Gartner’s conclusion:

Ultimately, Gartner believes the semiconductor landscape in 2016 will contain fewer and bigger vendors, reconfigurable devices, very high volume manufacturing by ‘megafabs,’ OEMs transitioning to service providers, fragmented applications, and increased role for foundries, highly disruptive technologies, commodity chip making, fewer chip designs, consumer-medical applications, longer lifetime requirements, manufacturing partnerships between big vendors, an increased number of system designs, power service providers controlling chip usage, IP playing a critical role, and consumer technology spilling into other areas.

In other words, a lot like the current landscape, only more so.

Source: Tech Research Firm Gartner Forecasts Turbulence for Semis