Global semiconductor sales are to slump by 19% this year, according to one of the gloomiest forecasts to date from e-distributor iSuppli.
Last month, analysts at Gartner Dataquest and Future Horizons offered figures for the decline of between 15 and 17%.
The iSuppli research concludes that the global supply chain is "still awash in excess inventory and new orders at chip makers remain low or non-existent".
Greg Sheppard, iSuppli's vice-president for market intelligence services, said: "While there is good news for some market segments, we forecast a 19% decline in worldwide semiconductor revenue this year, as bloated inventories continue to put a damper on unit ordering and prices."
Sheppard expects revenue growth to return in the third quarter, but at a slow rate because of soft demand from the main market drivers.
"Add this soft demand to the new fab capacity coming online and downward price pressure for many semiconductor commodities — particularly memory, microcomponents and many ASSPs — is un-avoidable," he added.
Like many others, Sheppard says the speed and depth of the downturn had been greater than could have been anticipated.
"The three application sectors that have been the recent demand drivers — PCs, wireless and networking — have all hit the skids simultaneously," he said. "And our forecasts for future growth in each of these areas are far below the levels of the last few years for the foreseeable future."
The iSuppli research draws some comfort from stabilising inventories in the PC market, although growth rates have slowed there as well against a year ago.
The wireless market is expected to return to replenishment ordering by June. Excess inventory problems at contract manufacturers should also begin to be resolved this quarter, the report says.
"The prospects for foundries will also brighten in the third quarter, as big communications-centric customers resume component ordering," said Sheppard. "But even after the huge inventory write-downs taken by Cisco [Systems] and other major players, the overall networking sector will remain moribund until the fourth quarter.
"In fact, the FPGA/PLD suppliers serving this market are still holding six months of inventory, and are clearly in the worst shape of any group of semiconductor manufacturers."
The report also analyses the inventory performance of leading companies in key electronics sectors, finding that even many of the top performers have experienced significant increases.
Avnet's inventory for Q12001 was 71 days, six days up on the same period of 2000. At the leading contract manufacturer Jabil, inventory rose by 10 days over the same period to 52 days.
The report is available for download from www.isuppli.com