Forecast Lowered For Global Semiconductor Market - InformationWeek

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Infrastructure // PC & Servers

Forecast Lowered For Global Semiconductor Market

World Semiconductor Trade Statistics said the economic slowdown is impacting the industry, but predicted the market would pick up considerably in 2010.

World Semiconductor Trade Statistics on Tuesday significantly lowered its forecast for the global semiconductor market for this year and next year, but predicted the market would pick up considerably in 2010.

The market this year would grow 2.5% over last year to $261.9 billion, the industry group said. WSTS had projected a 4.7% increase in May, but was forced to lower its forecast due to a weak fourth quarter stemming from the current economic slowdown.

The semiconductor market is expected to weaken further next year, falling 2.2% from this year to $256 billion, the group said. In 2010, however, rising demand for electronic products, such as PCs, digital consumer appliances, mobile phones, and automotive electronics, is expected to boost the semiconductor market 6.5% over 2009 to $273 billion.

"These trends are expected to unfold in a challenging, yet generally healthy world economy," WSTS chairman Ulrich Schaefer said in a statement. "Although the present worldwide economic crisis will cause a reduction of sales in the next year, in the long run this positive trend will, however, continue."

The WSTS expects growth in the semiconductor market to peak in 2011 with the Asia-Pacific region continuing to be the fastest-growing geographical area because of strongly rising domestic demand and the continuing shift in manufacturing to the region.

The WSTS lowered its projection less than a week after industry bellwether Intel lowered its fourth-quarter earnings forecast as a result of lower-than-expected sales across the globe and in every PC market segment. Intel lowered its revenue outlook to $9 billion, plus or minus $300 million. The company had projected revenue of between $10.1 billion and $10.9 billion.

Market research firms, such as Gartner and iSuppli, have also lowered their forecasts for the semiconductor industry.

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