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Semiconductor revenue to fall again next year: Gartner
Washington (AFP) Dec 16, 2008 Worldwide semiconductor revenue is forecast to drop next year, the first ever back-to-back years of declining sales, market research firm Gartner said Tuesday. Gartner said worldwide semiconductor revenue is forecast to total 219.2 billion dollars in 2009, a 16.3 percent decline from 2008 revenue. Gartner has forecast revenue for the industry of 261.9 billion dollars in 2008, according to preliminary figures, a 4.4 percent decline from 2007. In a forecast issued in mid-November, Gartner said worldwide semiconductor revenue was expected to grow 0.2 percent in 2008 and for the market to decline 2.2 percent in 2009. But the Stamford, Connecticut-based technology market research firm said the financial crisis "is having an unprecedented negative impact on fourth quarter 2008 sales and profits." Gartner said it expects semiconductor sales in the fourth quarter of 2008 to show a record quarter-on-quarter decline of 24.4 percent, surpassing the 20 percent decline record set in the second quarter of 2001. "While many executives may try to compare this downturn to the 2001 tech bubble, this downturn is different in many ways," said Bryan Lewis, research vice president at Gartner. "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," he said. "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." Semiconductor sales declined a record 32.5 percent in 2001 from the previous year. Gartner said the "wild card" for the semiconductor industry in 2009 is sales of dynamic random access memory (DRAM) chips, a key component in computers and other electronics, which have been slumping for 18 months. "The DRAM market is so bad that suppliers must either significantly scale back supply, or the weaker players will be forced into mergers or bankruptcy," said Andrew Norwood, research vice president at Gartner. "Either way, we are expecting DRAM pricing to firm during the second half of 2009, and this has the potential to moderate the decline in 2009 semiconductor revenue. "Only widespread government support for the ailing DRAM vendors could avert this supply rationalization, and that would be a disaster for the industry as it would just prolong the current downturn," he said. "In the negative scenario, the semiconductor industry could decline 24.7 percent (in 2009)," Gartner said. The market research firm said it expects the semiconductor industry to bounce back in 2010 and 2011, with worldwide semiconductor revenue reaching 251.2 billion dollars in 2010, a 14.6 percent increase from 2009, and 274.9 billion dollars in 2011, a 9.4 percent increase from the previous year. Share This Article With Planet Earth
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