SAN JOSE, Calif. -- Look out below! The sky is falling on the IC business.
There are more gloomy IC forecasts out in the market.
Gartner Inc. projects that the IC market will fall by 16.3 percent in 2009. Broadpoint.AmTech sees a 20 percent drop next year, while Databeans Inc. projects a 6 percent decline.
''We believe that total calendar 2009 semiconductor (sales) will decline by 20 percent, followed by a limited snapback of 15 percent in calendar 2010,'' said Broadpoint.AmTech analyst Doug Freedman, in a report.
''The present cycle is happening faster and looks to be as deep as the 'dot.com' bubble. What is different is that managements are reacting differently -- some are adjusting order and shipment terms to reduce channel inventories as fast as possible; others hold to terms that likely lag the cycle, but may also mute the recovery as a result,'' Freedman said.
''We did not enter this cycle with the massive inventory position and expectation of limitless growth -- growth expectations have been ramped down in every year of the post 'dot.com' bubble,'' he said. ''As a result, and barring more negative macro developments, we believe this cycle will return to demand levels faster than the 'dot.com' cycle.''
What are the good and bad markets? ''We expect the PC cycle to lag the broader semiconductor cycle as growth in netbook/nettops (new lower cost products) mask the broader decline in IT and consumer units,'' he said.
''We believe the memory industry as a whole is nearing a cyclical bottom driven by the significant supply-side rationalization that is taking place. We expect DRAM and NAND supply/demand dynamics to improve with a return to a state of balance in 2009,'' he said.
''The inflection point going from an oversupply to balance is likely to occur around mid-2009, leading to an improved pricing environment in 2H '09,'' he said. ''PC OEMs and system builders typically start building DRAM inventory ahead of the seasonal increase in the third quarter, and the second quarter is typically the second strongest quarter for NAND demand from a seasonal perspective. We also expect the remaining 200-mm DRAM and NAND production to be decommissioned by mid-2009, contributing to the rationalization process in 1H '09.''
Others are slightly more upbeat. 2008 is expected to turn slightly positive for the semiconductor industry, which will reach $258 billion in total revenue, for a 1 percent annual increase from 2007, according to Databeans. Lackluster growth is driven primarily by the memory segment, which will fall 16 percent from $58 billion in revenue in 2007 to $48 billion in 2008, according to Databeans.
Two semiconductor markets--automotive and computers--will drag down the IC market in 2009. In total, semiconductor sales will fall 6 percent to $242 billion in 2009, according to Databeans.
Databeans predicts the market will rebound and improve 12 percent in 2010, thanks to new technologies, government plans, and increased consumer confidence.
''Memory will make a significant comeback by way of industrywide incorporation of Solid State technology into a myriad of application segments and hybrid drives that combined with traditional rotating HDDs in PCs,'' according to the firm. ''This is projected to help stabilize memory pricing, which has been steadily declining over the last year.''
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