SAN FRANCISOMarket research firm iSuppli Corp. Thursday (Oct. 9) trimmed its 2008 semiconductor industry revenue forecast amid signals that the chip market may be feeling the impact of the credit crisis and economic downturn.
"The credit crisis is impacting the semiconductor market on several levels," said Dale Ford, senior vice president of market intelligence at iSuppli (El Segundo, Calif.), in a statement.
iSuppli trimmed its 2008 IC revenue forecast to 3.5 percent from 4 percent, but warned of "significant potential downside if economic conditions continue to worsen."
iSuppli significantly downgraded its outlook for memory revenue, particularly DRAM. iSuppli lowered its 2008 semiconductor memory revenue forecast by 5.8 percentage points, and its DRAM outlook by 5.4 points. iSuppli increased its 2008 revenue forecast for application specific standard product devices by 3.2 percent, partially offsetting the memory drag.
Wall Street's meltdown could have a broad effect on consumer confidence and spending if the overall economy collapse, Ford said, which would impact the demand for chips.
"With companies unable to get credit, the crisis could spread to the wider economy, impacting demand for electronic equipment and semiconductors," Ford said.
Rival market research firm Gartner Inc.
gave indications Thursday that it may trim its 2008 and 2009 IC forecasts. Gartner currently projects that the IC market will grow 4.2 percent in 2008 and 7.8 percent in 2009.
Gartner on Wednesday cut its semiconductor industry capital spending forecast, predicting declines of 25.7 percent in 2008 and 12.8 percent in 2009 before a recovery in 2010.
New signs of weakness have mounted in the DRAM market in recent times, including weakening demand from PC OEMs, iSuppli said. The firm last month cut its rating of near-term conditions for DRAM suppliers to "negative" from "neutral."
iSuppli said PC demand continued to defy the economic downturn through the second quarter. The firm said it remains "cautiously optimistic" about PC sales through the end of the year, holding to a prediction of 12.5 percent growth in PC unit shipments in 2008.
The U.S. Semiconductor Industry Association this month reported global semiconductor sales rose 5.5 percent in August compared to a year earlier, indicating that chip sales growth continues to track according to iSuppli's expectations, the firm said.
Ford noted that the chip industry will be hurt by an expected drop in demand for electronic equipment from Wall Street firms.