LONDON A mid-year slump in the western economy is likely to inhibit consumer electronics spending and hold annual semiconductor revenue growth back at 11.2 percent in 2010, according to Robert Castellano of market research company The Information Network (New Tripoli, Pennsylvania).
"Our U.S. weekly leading economic indicators are pointing to a weakening of the U.S. economy in mid-2010 resulting in a slowdown in semiconductor revenues," said Castellano. Personal consumption will remain sluggish in the second half of 2010 because of a jobless recovery, further deterioration in credit availability and continued weakness in home prices, he said.
While the possibility of a double dip in general economies in the western hemisphere has been acknowledged many observers have commented on the relatively robustness of global consumer electronics markets in 2009.
"The U.S. is the largest consumer electronics market. In 2009, 20 percent of the global consumer electronics revenue came from purchases in the U.S., followed by Western Europe with 19 percent. Weak consumer demand in 2010 will translate to weak chip sales," Castellano said. As a result he predicts semiconductor revenues will grow 11.2 percent in 2010 to $245 billion, up from $220 billion in 2009.
Lower chip sales will also impact capital expenditure. Forecasts are pointing to global capex growing more than 50 percent in 2010. However, with the slowdown in chip sales, semiconductor manufacturers will trim capex to the 20 percent range, Castellano said.
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