STAMFORD, CT – Despite ongoing demand from emerging markets, electronics sales will slow as consumers worldwide cut spending in response to the sluggish economy, says Gartner Inc.
"In coming months we expect to see signs of a widespread slowdown in the electronics sector," said Richard Gordon, Gartner analyst. The chip industry will most likely not begin recovery until the second half of 2009, says the firm.
 
PC and cellphone sales have held up well so far to this year because of demand in emerging markets such as China, India, Russia and South America, Gordon said, according to published reports. But, these nations will eventually feel the impact of global economic struggles.
 
In March, Gartner lowered its 2008 global semiconductor forecast, citing falling memory chip prices and the weakening global economy.
 
In March, Gartner’s 2008 global semiconductor revenue forecast dropped to 3.4%, to $278.4 billion, compared to a prior prediction of 6.2%. In 2007, semiconductor revenue reached $269.4 billion, up 2.5% year-over-year.
 
A week later, Gartner cautioned about increasing chip inventories, which continues to be an issue, according to the firm.
 
Also, many memory chipmakers recently have reported huge second-quarter losses, with expectations low for the third quarter as well, says the researcher.