SAN JOSE, Calif. Klaus Rinnen, an analyst with Gartner Inc., warns that a potential recession could spell trouble for the IC industry.
''U.S. government economists and financial counselors are now warning that the U.S. could experience a recession as a consequence of subprime mortgage debt and the tightening of credit,'' Rinnen warns in a newletter.
''Based on a rising probability, we ask the hypothetical question: If the U.S. enters a recession during the next six months, what would be the impact on the semiconductor industry? We believe the semiconductor industry would fall into a demand-driven downturn in 2008,'' he said.
''If a recession were to hit the U.S. in 2008, the semiconductor industry could experience a
demand-driven downcycle, which would likely extend into 2009,'' he said. ''The severity of this cycle could depend on the depth and speed of a U.S. recovery as well as the extend of collateral damage, if any, to other economies around the globe.''
The damage? ''For 2008, semiconductor equipment companies are most at risk during a recession scenario, while chip companies would be for less impacted. Equipment companies' revenue in a mild recession could
drop as much as 15 percent to 20 percent in 2008, while chip company revenue may decline in the