SAN JOSE – Slowing demand for PCs and cellphones will stall the semiconductor industry recovery, a group of analysts predicted during SIA’s 2009 forecast Thursday.
The group of prognosticators asserted 2009 sales will be bleak relative to historical standards, with consolidation possible on the equipment side.
Among the bears was VLSI Research senior economist Aida Jebens,who forecasts a 6.9% drop in IC sales next year. “Growth will be flat, if not negative. Moreover, pricing pressure will flatten revenues even if unit shipments grow, she said.
VLSI’s price index shows ICs in “ really bad shape,” Jebens said.
Advanced Forecasting CEO Moshe Handelsman says worldwide IC revenues fell 2% in 2008, and predicts a larger decline for 2009.
Dale Ford, senior vice president, marketing intelligence at iSuppli Corp., says shipments will be down 4 to 5% for 2008 and will worsen next year. This deep decline should turn around in late 2009 to early 2010, he says, then rebound in 2010.
Calling 2009 a “year of austerity,” Infrastructure director of research Carl Johnson sees “unheard of declines” for components for PCs, which could be down 50% during the first half.
The analysts agreed inventories could become a problem in the coming year as OEMs pull back orders.
Slowing End Demand
Most see slowing demand for electronics. VLSI predicts an overall drop of 2.6% year-over-year in 2009, with PC shipments growing 3 to 5%, but negative growth for cellphones.
SEMI, meanwhile, says the notoriously cyclical semiconductor equipment market will fall 21% in 2009, following 2008’s 28% year-over-year drop.
Bookings and sales could fall to 2003-03 levels, pegging the overall capital spending at $22 billion. Equipment represents 12% of device revenue, “an all-time low,” says Lara Chamness, senior market analyst, industry research and statistics.
IC and related manufacturing equipment will be down 24.7%, VLSI predicts. iSuppli’sFord thinks PCs will show modest growth, while flat-screen LCDs will be flat.
The overall economy will grow, but sluggishly. Ford projects GDP growth of 2.2% in 2009, noting some foresee a decline.
Infrastructure’s Johnson predicts a “big shakeout” in the industry. “It will be survival of the fittest. The longevity of the business model is really important right now.”
Whether governments will intercede remains unknown, but is a potentially huge factor. “At some point for the semiconductor industry, the government will take on a role, but that role is a significant unknown right now,” says Ford. “And it won’t be the same role globally. We will deal with trade issues and run the risk of trade wars.”
“Wall Street will not be the solution,” he added. “That door has closed.”
But they agreed that with much of the foundry work now in Asia, the pressure will be on foreign governments, particularly in Asia, to make decisions on bailouts.
Semiconductors have a future in photovoltaics, one area that has seen outside investment, but that sector too will be tied to government subsidies. As Ford says, “As energy prices come down, there will be less willingness to invest in alternative energy solutions.” Johnson agrees, stating photovoltaics would be a longer-term play. “The reality is we’re sitting on the solar business; the tree will shake, and the semiconductor business has a role to play in this.”
SAN JOSE -- Flextronics is denying reports it is seeking a buyer for its plant in northwest Shanghai, according to published reports.
Last week, rumors spread that the company, the world's second largest EMS firm, would close up to 12 factories worldwide. In response, Flextronics senior chief director for marketing and communications business in Asia Valeria Kurniawan debunked the rumors, saying that although some cost-cutting measures would be taken, the plants were not on the market.
Flextronics has two large assembly plants in the Shanghai area, one in Malu, in northwest Shanghai, and one in Pudong, across the river from downtown Shanghai.
TAIPEI – The head of Foxconn Technologies today announced layoffs of up to 5% of its worldwide workforce, citing the economic environment.
Hon Hai chairman Terry Guo said the world's largest ODM/EMS firm will cut 3 to 5% of its staff, which according to Hon Hai's website is more than 400,000, but which other sources have pegged at more than 450,000 in China alone. It is unclear whether recently announced cuts of up to 1,500 employees in Hungary are included in Guo's latest announcement.
"The worst has not come yet," Gou reportedly said.
The news comes a month after Hon Hai spokesman Edmund Ding denied public reports the EMS firm was gearing up for mass layoffs.
EL SEGUNDO, CA — Global notebook PC shipments exceeded those of desktops on a quarterly basis for the first time ever in the third quarter, according to iSuppli Corp.
Notebook PC shipments rose almost 40% in the third quarter of 2008 compared to the same period of 2007 to reach 38.6 million units. Conversely, desktop PC shipments declined by 1.3% for the same period to 38.5 million units.
“Momentum has been building in the notebook market for some time, so it’s not a complete surprise that shipments have surpassed those of desktops,” said Matthew Wilkins, principal analyst for compute platforms at iSuppli. “However, this marks the start of the age of the notebook. The notebook is ... now a computer for everyman.”
The notebook’s ascension to PC supremacy came during a strong quarter for the overall market. “While the third quarter will be remembered as the time when the scale of the global economic/credit crunch truly became apparent, the PC market managed to deliver strong unit shipment growth during the period,” Wilkins noted. Worldwide PC unit shipments rose 15.4% year-over-year, with 79 million units shipped, topping previous iSuppli’estimates of 12%.
There were no changes to the Top-5 PC OEM listings and rankings for the third quarter, according to iSuppli. H-P retained its No.-1 ranking with shipments of 14.9 million units and a market share of 18.8%. Dell was second with shipments of slightly less than 11 million units (13.9% share). No. 3 was Acer with shipments of 9.7 million units (12.2% share). Lenovo and Toshiba ranked fourth and fifth, with market shares of 7.5% and 4.6%, respectively.
Acer's shipment share rose 45% sequentially and 79% year-over-year, on strong demand for netbooks.
Among other vendors, Asustek was sixth,while Apple lost almost half a point of market share on a sequential basis at 3.2%, placing it seventh.
On the strength of the third-quarter numbers, iSuppli slightly raised its 2008 unit growth forecast from 12.5% to 13%. The firm's revised 2009 outlook calls for PC unit growth of 4.3%.
GAITHERSBURG, MD -- The National Institute of Standards and Technology (NIST) is soliciting white papers and detailed research proposals on critical national and societal needs that can be funded under its Technology Innovation Program (TIP).
TIP manages cost-shared funding for high-risk, high-reward research projects by single small-sized or medium-sized businesses or by joint ventures that also may include institutions of higher education, nonprofit research organizations and national laboratories.
The 2008 the TIP competition sought new technologies for inspecting, monitoring and evaluating critical components of the nation's roadways, bridges, and drinking and wastewater systems.
In 2009 NIST is particularly interested in white papers that would help further refine several topic areas now under consideration, including:
Civil infrastructure; complex networks and complex systems for energy delivery, telecommunications, transportation and finance; energy technologies that address emerging alternative energy sources; water technologies that address growing needs for fresh water supplies and ensure the safety of water and food supplies from contamination; manufacturing improvement; nanomaterials and nanotechnology; personalized medicine and sustainable chemistry.
White papers can be submitted to meet several due dates, including: Jan. 15, 2009, March 9, 2009, May 11, 2009, and July 13, 2009. White papers may be mailed to the National Institute of Standards and Technology, Technology Innovation Program, 100 Bureau Drive, Stop 4750, Gaithersburg, MD 20899-4750, Attention: Critical National Needs Ideas, or may be emailed to This email address is being protected from spambots. You need JavaScript enabled to view it..
For more information go to www.nist.gov/tip or contact Michael Baum, 301/975-2763, This email address is being protected from spambots. You need JavaScript enabled to view it..
ST. PETERSBURG, FL – Jabil Circuit today reported flat fiscal first-quarter revenues of $3.4 billion, while preliminary GAAP operating income plunged 21% from last year to $77.7 million.
