EL SEGUNDO, CA – Amid rapidly deteriorating conditions in the global economy and electronics value chain, iSuppli Corp. now predicts worldwide semiconductor revenue will decline in 2008 compared to 2007.
Global semiconductor revenue now is expected to decrease to $266.6 billion for the full year, down 2% year-over-year. iSuppli's previous forecast in September called for 3.5% growth.
iSuppli’s forecast tracks with an announcement yesterday by World Semiconductor Trade Statistics group, made up of 66 semiconductor manufacturers, that lowered its global sales estimates to a 2.2% drop in 2009, to $256 billion.
“The first evidence the semiconductor industry was entering a recession arrived in the third quarter, before the financial crisis began sweeping the world in October,” said Dale Ford, senior vice president, market intelligence services for iSuppli. “iSuppli previously had predicted the third quarter would generate 7.9% growth in semiconductor revenue compared to the second quarter. However, actual growth in the third quarter came in at a very anemic 2.5% quarter-to-quarter rise. Year-over-year revenue in the third quarter was down by 2.9%.
“Weak-to-strongly-negative growth was reported in the third quarter by the complete range of semiconductor suppliers, large and small, across all markets,” Ford noted.
Memory suppliers are suffering the most severe declines, with the overall market expected to drop 8.8% compared to last year.
Numerous semiconductor suppliers are reducing their fourth-quarter outlooks on an increasingly frequent basis, says iSuppli. This would seem to indicate there is a strong possibility the fourth-quarter decline and the overall 2008 results could fall even further than iSuppli now forecasts.
“In discussions with semiconductor suppliers, equipment OEMs and contract manufacturers, a story of fear and great uncertainty has emerged,” Ford said. “As dramatic declines in consumer and industrial confidence began developing in late summer, order cancellations began to grow and in many cases, slowing orders degenerated into a complete stop in orders as players across the supply chain moved to extremely cautious positions in the face of increasingly negative economic news.
“The psychology of many industry players now has shifted to a survival mentality, with cost-control and cash-conservation considerations driving decisions, according to the firm. The extremely low level of consumer confidence points to a difficult fourth quarter for the industry. The remaining questions are how deep and how long this decline will extend in 2009 and possibly 2010.”
EL SEGUNDO, CA – After years of double-digit annual growth, China's 2008 semiconductor sales are expected to rise only 6.7% year-over-year to reach $81.7 billion, iSuppli Corp. predicts.
China’s domestic market situation improved in 2008, despite regulatory restrictions and an incomplete supply chain, says the research firm. Popular applications supporting new domestic standards will appear in 2009 as their industrial ecosystems mature. Although there is substantial economic uncertainty, continued revenue growth is anticipated in 2009, according to iSuppli.
Moreover, venture capitalists generally lack interest in China's IC industry. A majority of semiconductor firms are short of capital and face cash flow problems.
“iSuppli expects more than 100 Chinese IC companies to disappear within the next two years,” warned Vincent Gu, China research analyst at iSuppli. “Many companies presently are seeking buyers, and a total of four companies already have been acquired by foreign semiconductor firms during the past 12 months.”
iSuppli predicts China's fabless IC industry will grow faster than the foundries, but notes it is fragmented, with about 50 successful companies and dozens more struggling to survive.” Most companies have announced layoffs, cut production lines or have shut down entirely,” Gu said.
MINNEAPOLIS – DfR Solutions, provider of quality, reliability, and durability solutions, has hired Dr. Randy Schueller, an expert in component packaging and Pb-free.
Dr. Schueller will head the firm’s newly established Minneapolis office.
Prior to joining DfR, Dr. Schueller held management and leadership positions in component engineering, Pb-Free transition, and packaging at 3M, Extreme Devices and Dell.
SOUTH PASADENA, CA– GreenSoft Technology, Inc introduces GreenData Manager-REACH (GDM-REACH), a desktop application that manages and analyzes green compliance data and documents. Users can track and report on the presence of Substances of Very High Concern (SVHC) in the latest European regulation, REACH.
TAIPEI, TAIWAN– Asustek Computer has cut orders with its upstream notebook component suppliers by 20% to 30%, according to industry sources. Although Asustek is not the only company that is cutting order volume, it is unusual for cutbacks to be made during the middle of a month. Market watchers believe that a decrease in notebook demand in Europe is the reason for the company’s slowdown. It is unlikely the company will meet its target of shipping six million notebooks by the end of the year.
SAN JOSE – Sun Microsystems will cut up to 18% of its global workforce – an estimated 5,000 to 6,000 jobs – in a move aimed at cutting annual costs by $700 million to $800 million.
