Chip Market Turnaround Unlikely In 2009 - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Infrastructure // PC & Servers

Chip Market Turnaround Unlikely In 2009

The semiconductor industry has done a better job managing inventory than in the 2001 economic crisis, said Gartner.

The semiconductor market is unlikely to see a significant market turnaround this year, despite manufacturers' success at reducing inventory, which had reached levels of "severe excess" for four quarters, a research firm said.

Gartner reported Monday that its Dataquest Semiconductor Inventory Index continued to fall in the third quarter, dropping into the "caution zone" from the "severe excess" level. However, the analyst firm believes manufacturers won't see stabilization in inventory until at least 2010, when growth is expected to resume.

While some semiconductor categories are seeing an increase in sales, others are seeing a drop in inventory because of "continued conservative efforts in keeping the supply chain lean," Gartner analyst Gerald Van Hoy said in a statement.

"Concerns of possible shortages in inventory seem to be premature, but inventory should continue to be monitored, especially in large-scale markets, such as PCs and cellular phones," Van Hoy said.

While shortages are possible, they will most likely be "few and far between," Gartner said. Those that do occur are expected to be short-lived.

While the semiconductor market will experience a drop in revenue this year, growth is expected to return next year, with sales continuing to rise in 2011, the researcher said. Overall, while the decrease in demand has been severe in the global recession, manufacturers have done a better job at keeping inventory in line with demand than in the last economic crisis that started in 2001 following the dot-com bust.

Gartner in February predicted that worldwide revenue from semiconductors this year would fall 24.1% from 2008 to $194.5 billion, a near record low.


Get all the data from this year's InformationWeek 500 survey free for a limited time. Our report examines business and technology best practices as well as IT investment trends among the nation's most innovative IT users. It also provides industry comparisons against which you can benchmark your company's strategies. Download the report here (registration required).

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
News
Top 10 Data and Analytics Trends for 2021
Jessica Davis, Senior Editor, Enterprise Apps,  11/13/2020
Commentary
Where Cloud Spending Might Grow in 2021 and Post-Pandemic
Joao-Pierre S. Ruth, Senior Writer,  11/19/2020
Slideshows
The Ever-Expanding List of C-Level Technology Positions
Cynthia Harvey, Freelance Journalist, InformationWeek,  11/10/2020
White Papers
Register for InformationWeek Newsletters
Video
Current Issue
Why Chatbots Are So Popular Right Now
In this IT Trend Report, you will learn more about why chatbots are gaining traction within businesses, particularly while a pandemic is impacting the world.
Slideshows
Flash Poll