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Gartner: No electronics, IC recovery yet

Posted: 13 Apr 2009 ?? ?Print Version ?Bookmark and Share

Keywords:IC recovery? electronics market? semiconductor industry?

Market research firm Gartner Inc. said that recent positive industry events are characteristic of a demand reset but do not mean that the electronics and semiconductor markets recovering. At least not yet.

Excess inventories have been reduced and a first bottoming in some parts of the electronics markets is providing a stabilizing influence, according to Gartner analysts. But almost all sectors of the electronic equipment market are still declining and must hit bottom before a rebound to positive growth is possible. This rebounding process will occur over a period of almost two years, the firm predicted.

Though nearly everyone agrees it's still to even talk about an IC recovery, analysts have in recent weeks pointed to positive industry signs. Others have suggested that record low inventories could spark a rapid semiconductor industry recovery when the economy starts to improve.

Gartner analysts said they believe the equipment markets will begin their recovery in the final quarter of 2009. Much uncertainty still rests on the macroeconomic recovery and the effectiveness of government stimulus packages, they said.

The damage from the current industry recession will be felt for a long time, Gartner said. The industry must consider and prepare itself for significant changes in consumer buying behavior, technology demand patterns and a changed supplier landscape.

Signs of growth
Although the PC market is already reaching the bottom of its growth pattern, the majority of electronics segments will not reach bottom until 2H 09, according to Gartner's analysis. Until then, uncertainty will remain high and visibility low.

The first signs of growth will be led by seasonal buying patterns in the PC market during Q4 09, while other sectors will not begin to show growth until 2010.

Gartner analysts predicted that the first sector to show sustainable recovery would be mobile phones, beginning in Q2 10.

Gartner said there is a downside risk of a W-shaped recovery pattern. This is less likely but, should it occur, it could push sustainable growth into 2011.

Semiconductor sales are not expected to regain the 2007 peak sales levels during the current five-year forecast period, the firm said.

The current recession is pushing many suppliers to the brink of ruin, and several will not survive. While the emerging supply chain will be leaner and stronger, it will look different, Gartner said.

- Dylan McGrath
EE Times

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