Semis set for another bad year

According to research and consultancy company Garter, the industry has never seen revenues decline in consecutive years, but it forecasts sales of in 2009 will be $219.2billion, a 16.3% drop from this year’s level. Its preliminary 2008 market share results predict revenues of $261.9bn, a 4.4% decline over 2007. Gartner previously believed the market would decline by 2.2% in 2009. However, it says the financial crisis is having an unprecedented negative impact on fourth quarter 2008 sales and profits, which are expected to be more than 24% less than in the third quarter. Bryan Lewis, research vice president at Gartner, said: “This downturn is broad based, not limited to only technology, has a much different growth profile before the downturn and has far less inventory buildup. Inventory levels this time have been monitored and more tightly controlled throughout the entire food chain and this will help the market come back more quickly than in 2001.” The semiconductor industry experienced its worst revenue downturn in history in 2001, when sales declined by 32.5% from the previous year. However, that collapse was following two strong revenue growth years in 1999 and 2000 when revenue grew 22% and 34%, respectively. Gartner expects the semiconductor industry to bounce back in 2010 and 2011, with worldwide semiconductor revenue reaching $251.2bn and $274.9bn in 2011, representing increases of 14.6 and 9.4% respectively.