Semicon to decline by 2 percent in 2008

Semiconductor Industry Outlook

Semicon to decline by 2 percent in 2008

it is possible for the decline to worsen as more companies revise down their fourth quarter guidance, says iSuppli

Pradeep Chakraborty

Friday, December 05, 2008

EL SEGUNDO, USA: This is the time of the year when you analyze and report on the outlook for the coming year. The global semiconductor industry has been going through an extremely challenging period, and even more so, given the global financial economic crisis.

I caught up with Dale Ford, senior vice president, market intelligence services, for iSuppli, to find out more about iSuppli's recent top 20 semicon supplier rankings and the overall climate for 2009. Excerpts.

CIOL: The key question: has the semicon industry really lost the money-making ability?

Dale Ford: The semiconductor industry goes through cycles of revenue growth and profitability. It would not be correct to extrapolate the current challenges of the semiconductor industry and say that the industry has “lost its money-making ability.” iSuppli expects the industry will experience restructuring during this downturn that will help it emerge to renewed revenue growth and profitability.

CIOL: By how much is the global semicon revenue likely to decline in 2008? What are the chief reasons?

DF: iSuppli predicts that the semiconductor industry will decline by 2 percent in 2008. However, it is possible for the decline to worsen as more companies revise down their fourth quarter guidance. The primary reasons for the decline are the over supply of memory ICs and resulting steep price declines and the global financial/economic crisis that has impacted consumer spending and the production of electronic equipment.

CIOL: Among the top 20, how have the fabless companies fared overall?

DF: Qualcomm, Broadcom and nVidia are predicted to be the only fables companies in the top 20 semiconductor suppliers in 2008. Qualcomm and Broadcom are expected to see their revenues grow by 19.6 percent and 26.4 percent, respectively. Only nVidia is expected to see a decline in revenues with a projected contraction of 0.5 percent.

CIOL: There are some non-memory players in the top 20, who've registered declines. What are the reasons behind their decline?

DF: I would rather not comment on each individual company. The declining revenues are due to a variety of factors including divestiture of business units, declining markets, and lost market share.

CIOL: How are the fab spends looking like in 2009?

DF: Currently, we see fab spending declining significantly in 2009.

CIOL: Overall, what's the outlook for the global semiconductor industry in 2009?

DF: We have not released a formal forecast to the press at this time. However, I will say that we expect the semiconductor market to decline by more than 5 percent in 2009.

©CIOL Bureau

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analysis said on 12/30/2008 3:20:09 AM:
drop more than 10 percent now in 2009

to analysis

Mali C said on 12/8/2008 11:37:07 AM:
Industry restructuring in the downturn? Translates probably into more companies going down, more job cuts, fewer developments, maybe, more mergers (or big eating small)! industry will bounce back hopefully.

to Mali C

Cherey said on 12/6/2008 3:13:08 PM:
-2 percent in 08 and -5 percentgrowith in 09 is not a good sign

to Cherey

Alazapurkar said on 12/5/2008 3:58:22 AM:
brilliant work

to Alazapurkar