SCOTTSDALE, USA: The global recession will wreak havoc on semiconductor sales this year, reports In-Stat.

The worldwide semiconductor revenue will decline by nearly 20 percent in 2009 to $199.2 billion. The industry will not recover to 2007 levels until at least 2012.

“Declining confidence resulting from recent shocks and increased uncertainty about the future will lead to more conservative spending even after liquidity improves and the economic recovery is well underway,” says Jim McGregor, In-Stat analyst. “Restoring consumer and business confidence and overcoming excess capacity will be key to recovery and subsequent growth.”

Recent research by In-Stat found the following:

* Although recovery is expected to start in the second half of 2009, revenue growth in 2010 will be modest, at 11.8 percent.
* Digital Signal Processor (DSP) revenue declined by 14.9 percent in 2008 to $6.6 billion, its lowest level since 2003.
* In its most recent cycle, semiconductor fab capacity utilization peaked at 90 percent early in 2008, and dropped to 87 percent in the third quarter.

The downturn is expected to be deep enough, and long enough, for semiconductor capacity to ultimately fall, as a result of mergers, acquisitions, bailouts, restructuring, and other industry realignments.