Thursday, 6 November 2008

The Semiconductor Industry Has Seen A Decline, Says Gartner

According to market analyst firm Gartner, the economic crisis is having a significant impact on the semiconductor industry, as worldwide semiconductor revenue growth in 2009 is expected to be 1 percent, down by approximately 7 percentage points from previous estimates.

The analyst firm further adds that although semiconductor companies mostly met expectations for the third quarter of 2008, guidance for the fourth quarter of 2008 continues to drop. It estimates worldwide semiconductor revenue in 2008 to total USD 279.4 billion, a 2 percent increase from 2007.

"Semiconductor growth was surprisingly strong until recently, given the very weak economic environment, but this will start to change in the fourth quarter of 2008," said Bryan Lewis, research vice president at Gartner. "Mounting evidence suggests that the semiconductor industry will see negative growth starting in the fourth quarter of 2008, and that this will continue throughout most of 2009."

Furthermore, Gartner says that PCs and cell phones account for approximately a third of the total semiconductor market, so they are the biggest applications for adjusting growth. For example, if the system unit percentage change of PCs were lowered by 8 percent, this would impact semiconductor growth by 1.61 percent.

"In a recession, it's important to remember that there will not only be a potential reduction in the number of systems sold, but also a move to lower-cost systems with less semiconductor content," added Lewis.