Electronic Products & Technology

Semiconductor recovery commences


Electronics CEL

Although global semiconductor revenue is set to decline in 2009 for the second consecutive year, quarterly year-over-year growth is expected to finally return to the market in the fourth quarter, signaling the start of the industry recovery, according to iSuppli Corp.

As iSuppli previously announced, global semiconductor revenue is set to contract by 16.5 percent in 2009.

This follows a 5.4 percent decrease in 2008. However, revenue is expected to rise by 10.6 percent in the fourth quarter of 2009 compared to the same period in 2008. The fourth quarter will mark the first quarter in 2009 that revenue has risen compared to the same period a year earlier.

“The seeds of the current recovery were sown in the second quarter,” said Dale Ford, senior vice president, market intelligence, for iSuppli. “During that period, manufacturers began to report positive book-to-bill ratios, indicating future revenue growth. This was followed by another sequential increase in revenue in the third quarter.

“Meanwhile, semiconductor inventories returned to more normal levels in the third quarter after chip suppliers shed stockpiles. They did this by slashing costs dramatically in order to reduce unsold inventory they’d been carrying since the beginning of 2009.”


While these signs are encouraging, and sequential quarterly increases in revenue will continue into 2010, this growth will not be sufficient to lift semiconductor revenues back to pre-recessionary levels until the 2011-2012 time frame.

Furthermore, there remain some worrisome indicators, such as the climbing U.S. unemployment rate, which reached 9.7 percent in August and is projected to exceed 10 percent at its peak. Also worrisome are the struggling credit and banking markets as well as the rising number of foreclosures in the U.S. housing market, clouding the overall economic outlook. Collectively, these factors have served to constrain consumer spending.



Stories continue below

Print this page

Related Stories