iSuppli Lowers Forecast For 2008 Global Semiconductor Revenue

Market researcher iSuppli has lowered its revenue forecast for next year for the global semiconductor industry, saying customers are likely to cut orders due to economic worries.

Revenue next year is expected to reach $291.4 billion, a 7.5% increase from an estimated $270.9 billion this year, iSuppli said. The firm had predicted a 9.3% increase in September.

Global semiconductor sales are expected to be held back by economic conditions that will prompt nervous companies to cut orders, iSuppli said. Those conditions include rising energy costs and the sub-prime mortgage crisis in the United States.

The market is expected to be extremely weak in the first half of next year, with revenue declining 4.5% from the second half of this year to $135.9 billion. Memory prices are forecast to be hit especially hard due to an oversupply of product. Memory devices are expected to account for 21.6% of global semiconductor revenue in 2008.

iSuppli expects the market to recover in the second half of the year, but cautions that the potential arrival of a recession could scuttle the expected growth rate.

Along with the reduction in its semiconductor outlook, iSuppli on Thursday also reduced its 2008 growth forecast for electronic equipment. Global revenue is expected to rise by 6.6% from this year to $1.6 trillion. This is 0.4 of a percentage point less than iSuppli's previous forecast. The revision is due to slower growth in shipments of notebook PCs, advanced mobile phones, and digital TVs. The researcher raised its revenue forecast for electronic equipment this year to 7.4% from 6.8%, due to strong sales of notebook PCs and handsets.