"For only the second time in its history, the worldwide semiconductor market is expected to have two consecutive years of revenue decline," said James Hines, research director at Gartner. "We expect a decline of 0.6 percent in 2016 as the industry waits for the next demand driver to emerge."

Lowered estimates for production of PCs, ultramobiles and smartphones is reducing the demand for semiconductors in 2016, and no significant near-term driver has appeared to offset the reduction in demand in these key semiconductor markets.

While there are emerging opportunities for semiconductors in the Internet of Things (IoT) and wearable electronics, these markets are still in the early stages of development and are too small to have a significant impact on overall semiconductor revenue growth in 2016.