Electronics Production | October 01, 2009
iSuppli ups semiconductor forecast
Strong second-quarter sequential growth along with improving supply chain visibility and semiconductor demand trends has prompted iSuppli Corp. to upgrade its forecast of 2009 chip sales.
iSuppli now predicts global chip sales will decline by 16.5% in 2009, compared to the publicly announced forecast previously of a 23% drop. In a forecast delivered to clients in early August, iSuppli had improved its 2009 growth forecast to a 17.6% decline. The attached figure presents iSuppli’s current forecast of global semiconductor revenue. “Lack of visibility from the end market and through the electronics supply chain was a major problem for semiconductor suppliers in the first quarter,” said Dale Ford, senior vice president, market intelligence services for iSuppli. “However, due to a stabilizing economic environment in the second quarter and improving supply chain visibility, semiconductor shipments rebounded as inventories were replenished and modest forward-looking purchases were made.” Third-quarter semiconductor sales are benefitting from improved market outlooks by major OEMs in key markets such as PCs and mobile handsets. The global economy in the second quarter was boosted by worldwide economic stimulus efforts. Although the American Recovery and Reinvestment Act (ARRA) really didn’t go into effect during the period, China’s stimulus efforts spurred a massive increase in consumer purchasing in the country, benefitting worldwide economic conditions. Uncharted territory While the outlook for the global semiconductor market may have gained some clarity, the industry appears to have entered uncharted territory when it comes to tracking sales trends. “In the history of the semiconductor industry, the market has never had a cycle like this one,” Ford said. “Semiconductor sales have always been subject to a cyclical growth pattern that sees a move from a low point, through one or more supply-chain balancing periods and then to an eventual peak in revenue. However, the most recent cycle, starting in February 2006, was robbed of its peak. Just as the industry had achieved a balanced supply chain and was starting to move toward a peak, the global economic crisis drove the industry down.” For the semiconductor industry, this means a both a long and painful downturn. While revenue began growing on a sequential basis in the second quarter of 2009, sales will not begin to increase on a year-to-year basis until May 2010. This means the industry will endure 20 months without year-over-year revenue growth, compared to the 17-month downturn that the industry experienced during the 2001-2002 decline. While 2010 will bring a return to growth in the semiconductor industry with a 13.8% rise compared to 2009, the market won’t return to its 2007, pre-downturn level until 2012. Global semiconductor revenue will rise to $282.7 billion in 2012, compared to $273.4 billion in 2007. Equipped for downturn iSuppli forecasts that global revenue from shipments of electronic equipment will decline by 9% in 2009 to $1.39 trillion, down from $1.53 trillion in 2008. Growth will rebound by 5.2% in 2010 to reach $1.47 trillion. Image Source: Elmos
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