Following a slight revenue decline of 2 percent in 2008, analysts IDC expect a further revenue decline of 22 percent in 2009, due to double digit declines in unit shipments of key system markets, low utilisation rates and price erosion. The company says the worldwide semiconductor market will not recover until 2010. The abrupt slowdown will not only affect the U.S. and Europe, but also Japan and Asia/Pacific regions.
“The semiconductor industry downturn will be prolonged by macroeconomic uncertainty this year,” says Mario Morales, vice president for Semiconductor Research at IDC. “With demand visibility low, utilisation rates at frozen levels and supplier inventories growing because of deteriorating demand targets, IDC does not expect year-over-year growth for semiconductor revenues until the second quarter of 2010.”
“The semiconductor market, which is tightly correlated to GDP, will not reach an inflection point until GDP rises and consumer spending rebounds,” adds Brianne Lovett, a research manager at IDC. “The semiconductor market will begin to stabilise at the end of 2009 and improve in 2010 with a positive growth rate. However, the market will not rise to the levels seen in 2007 and 2008, until beyond 2011.”
Other key findings from the company include:
- Macroeconomic factors will bottom at the end of 2009 and won’t recover until mid 2010. The US will lead the worldwide recovery;
- DRAM and NAND markets stabilise by 2H09, but revenue growth does not return until 2010;
- Dedicated foundry market remains unstable through 1H09, as utilisation rates bottom by the middle of the year and then gradually recover;
- Capital spending declines by more than 45 percent in 2009;
- Connectivity, wireless broadband, multicore processors and NAND are the key technologies suppliers are investing in over the next couple of years;
- Suppliers with solid leadership and experience, and a healthy financial structure will be in the drivers seat when the market recovers.
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