SAN FRANCISCOMarket research firm iSuppli Corp. again upgraded its forecast for 2009 semiconductor sales Wednesday (Sept. 30), saying it now predicts a decline of 16.5 percent compared to 2008.
ISuppli (El Segundo, Calif.) in July forecast that chip revenue would be down 23 percent in 2009. In early August, iSuppli told clients it had revised its forecast to a decline of 17.6 percent.
Chip industry revenue will rise 13.8 percent in 2010, according to the updated forecast. But the market won't return to its 2007, pre-downturn level until 2012, the firm predicted.
ISuppli credited strong second-quarter sequential growth along with improving supply chain visibility and semiconductor demand trends for Wednesday's upgrade.
Click on image to enlarge.
"Lack of visibility from the end market and through the electronics supply chain was a major problem for semiconductor suppliers in the first quarter," said Dale Ford, senior vice president of iSuppli's market intelligence services, in a statement. "However, due to a stabilizing economic environment in the second quarter and improving supply chain visibility, semiconductor shipments rebounded as inventories were replenished and modest forward-looking purchases were made."
Third-quarter semiconductor sales are benefitting from improved market outlooks by major OEMs in key markets such as PCs and mobile handsets, iSuppli said.
Meanwhile, the global economy in the second quarter was boosted by worldwide economic stimulus efforts, iSuppli noted. Although the American Recovery and Reinvestment Act really didn't go into effect during the period, China's stimulus efforts spurred a massive increase in consumer purchasing in the country, benefitting worldwide economic conditions, iSuppli said.
But Ford cautioned that the semiconductor industry was now in uncharted territory. "In the history of the semiconductor industry, the market has never had a cycle like this one," he said.
While chipmakers started to experience sequential sales growth in the second quarter of this year, sales will not begin to increase on a year-to-year basis until May 2010, according to iSuppli's latest forecast. This means the industry will endure 20 months without year-over-year revenue growth, compared to the 17-month downturn that the industry experienced during the 2001-2002 decline, iSuppli said.
Global semiconductor revenue will rise to $282.7 billion in 2012, compared to $273.4 billion in 2007, according to iSuppli's forecast.