Recovery Coming for Electronic Equipment Makers Jul 8, 2009

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A sustainable recovery is about a year away for electronic equipment makers, with sales growth expected to follow, according to a report from Gartner Inc.

The report said that electronic equipment markets should begin a recovery in Q4 of this year, allowing the electronics industry to enter into a sustained recovery - as measured by a rolling 12-month comparison with the prior year - in the second half of 2010 with a reacceleration in sales in 2011. That will not happen, however, until all electronics markets hit bottom.

"Almost all sectors of the electronic equipment market are still declining, and we will need to see markets hit bottom before we see the waves of recovery and a rebound to positive growth," said Klaus Rinnen, managing VP at Gartner's semiconductor manufacturing group. "The wider process of rebounding will occur over a period of approximately two years."

Rinnen said the PC market is already reaching the bottom of its growth pattern, but noted that the majority of electronics segments will not reach bottom until the second half of 2009. Until then, uncertainty will remain high and visibility low.

Gartner said that mobile phones are expected to be the first market to achieve a sustainable recovery, edging PCs by about one quarter, Gartner projected, adding that for the industry as a whole, sustainable recovery will take longer as higher-priced and highly consumer-dependent segments are delayed.

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