Chip sales slide in Q4 amid inventory, pricing gloom
12/14/2012 5:43 PM EST
SAN FRANCISCO--A major industry analyst firm sounded alarm on global
IC sales Friday (Dec. 14), citing falling fourth quarter revenue for
chip vendors, relentless price pressure and stubbornly high
"Fears abound that industry revenue could decline even more than
currently predicted in the fourth quarter, if economic conditions do
not improve," IHS said in its regular Semiconductor Manufacturing
& Supply Market Tracker Report.
"The complete reversal in growth is indicative of how distressing
conditions have become for the industry, and the downward pressure
on sales has not eased," IHS said.
Q4 semiconductor revenue is forecast to fall by 0.7 percent compared
to the third, which will pull 2012 overall performance down farther
to a projected annual decline of 2.3 percent to $310 billion. The
semiconductor industry in 2011 rose 1.3 percent by contrast.
“The global economy continues to be the most critical variable
affecting the semiconductor space both this year and the next,
especially because the chip industry is highly dependent on consumer
spending,” said Len Jelinek, director and chief analyst of
semiconductor manufacturing at IHS. “And until consumers believe
their financial position is stable or improving, consumer spending
will likely remain soft.”
IHS said December will be lackluster months as anticipated holiday
system sales have already been made. In the near term, no major
IC-sales drivers are evident, IHS added.
The IHS also report emphasized its concern over high inventory
"Given the excess inventory, end-equipment manufacturers have been
delaying the placement of orders for additional components. The
result on the whole is that chip suppliers aren’t running their
manufacturing operations optimally, and also are manufacturing
products solely based on historical demand," IHS said.
The report did offer a ray hope among what it termed a "fragile
growth scenario." Supply and demand should even out in the first
quarter of 2013, and silicon shipments are forecast to rise near the
end of that period, IHS said.