LONDON – Market forecaster iSuppli Corp. has decided it should curb its enthusiasm for the global chip market in 2010. The firm says it sees softening demand and rising inventories and has trimmed its forecast to 32 percent.
Having predicted the market would show 31 percent growth in May the company joined with most other forecasters in raising its prediction to 35 percent in August. However, iSuppli expects the chip business to experience a soft landing in 2011 with semiconductor revenue in 2011 set to rise by 5.1 percent.
"There has been a significant slowdown in the second half in consumer demand for some electronic devices, including PCs," noted Dale Ford, senior vice president at iSuppli, in a statement. "Meanwhile, inventories have been building throughout the semiconductor supply chain. These factors will conspire to cause a small sequential decline in semiconductor revenue in the fourth quarter."
The 32 percent growth figure implies global semiconductor sales will amount to $302 billion in 2010, up from $228 billion in 2009, still a remarkably strong growth year but created partly by comparison with difficult 2009, which was impacted in its first half by the global economic crisis.
Despite the reduced outlook, revenue in 2010 will rise by about $74 billion compared to 2009 to produce record sales year $28 billion higher than 2007, the previous peak year for semiconductor revenue, according to iSuppli’s semiconductor industry analysis.
The market watch firm now expects that revenue in the fourth quarter will decline by 0.3 percent compared to the third quarter, roughly in line with typical seasonal changes and the first sequential decrease since the market collapse in the fourth quarter of 2008 and first quarter of 2009.