Report: Global Semiconductor Industry Will Decline This Year Jan 21, 2009

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Never before has the semiconductor industry experienced revenue declines in back-to-back years, but this will occur in 2009 as worldwide semiconductor revenue is forecast to total US$219.2 billion, a 16.3% decline from 2008 revenue, according to Gartner, Inc. Gartner’s preliminary 2008 market share results show 2008 revenue reached $261.9 billion, a 4.4% decline from 2007.

Gartner’s last official forecast, issued in mid-November, had expected 2008 worldwide semiconductor revenue to grow 0.2%, and for the market to decline 2.2% in 2009. However, Gartner says the financial crisis is having an unprecedented negative impact on 4Q 2008 sales and profits and it now expects semiconductor sales in 4Q 2008 to show a record quarter-on-quarter decline of 24.4%, surpassing the 20% decline record set in 2Q 2001.

Gartner analysts added that in the negative scenario, the semiconductor industry could decline 24.7%. Yet it expects the semiconductor industry to bounce back in 2010 and 2011, with worldwide semiconductor revenue reaching $251.2 billion in 2010, a 14.6% increase from 2009, and in 2011 revenue reaching $274.9 billion, a 9.4% increase from the previous year.

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