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Market researcher softens IC forecast

Posted: 05 Nov 2008 ?? ?Print Version ?Bookmark and Share

Keywords:forecast? IC? revenue?

Amid the economic downturn, Gartner Inc. has reduced its chip forecast for both 2008 and 2009.

For some time, Gartner has been making hints about a lowered IC forecast. In its earlier forecast, the research firm projected that the semi market would increase to about 4.2 percent in 2008. Now, it estimates that global IC revenue in 2008 would have a total of $279.4 billion, a 2-percent increase from 2007.

In its past forecast, the research firm projected that the IC industry would grow about 7.8 percent in 2009. Gartner now expects worldwide IC revenue in 2009 to total around $282 billion, a 1-percent increase from 2008 revenue.

But according to an e-mail newsletter, Gartner cites three "growth rate scenarios" for 2009. The ''most likely scenario" is that the IC industry would fall 2.2 percent in 2009. The "negative scenario'' is that the IC industry would fall 10.3 percent in 2009. The ''positive scenario'' is that the IC industry would grow 5 percent in 2009.

The current forecast calls for +1 percent in 2009. "We are saying -2 percent to 1 percent for 2009," said Bryan Lewis, research VP, Gartner. "Our 'sensitivity analysis' gives us +1 percent at this point with our assumptions," he added.

Although IC companies mostly met expectations for Q3 08, guidance for Q4 08 continues to decline.

''Semiconductor growth was surprisingly strong until recently, with the very weak economic environment, but this will start to change in Q4 08," Lewis said. "Mounting evidence suggests that the IC industry will see negative growth starting in Q4 08, and that this will continue throughout 2009," he added.

He also stressed the "R" word: recession. "In a recession, it's important to remember that there will not only be a potential reduction in the number of systems sold, but also a move to lower-cost systems with less IC content," he noted. Others see a slightly worse climate. Based on reports, Richard Tsai, president and CEO, Taiwan Semiconductor Manufacturing Co. Ltd (TSMC), described the present IC market as a "severe business environment."

TSMC, one of the bellwethers in the IC industry, expects a severe drop in demand in Q4 and projects a downturn in the overall IC industry for 2009. Tsai projects that the overall IC industry could drop from the mid-to-high single digits in 2009.

- Mark LaPedus
EE Times

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