SIA Forecast: Semiconductor Sales Slowing

SAN JOSE, CA — The Semiconductor Industry Association (SIA) released its annual forecast of global semiconductor sales, projecting the first decline in sales since 2001.

The forecast projects 2008 sales of $261.2 billion, a 2.2 percent increase from 2007 sales of $255.6 billion. Sales in the current quarter, historically a strong quarter for the microelectronics industry, are forecasted to decline by 5.9 percent from the prior quarter. SIA projects that 2009 sales will decline by 5.6 percent to $246.7 billion before resuming growth in 2010. Sales will grow by 7.4 percent in 2010 to $264.9 billion and by 7.5 percent in 2011 to $284.7 billion.

“The current global economic turmoil is clearly having a significant impact on semiconductor sales,” said SIA President George Scalise. “The fortunes of the semiconductor industry are increasingly tied to consumer spending on electronic products. Consumer purchases now drive well over half of worldwide semiconductor sales.”

SIA cited a recent Deutsche Bank report which estimates personal computer unit sales will decline by 5 percent and cell phone unit sales will decline by 6.4 percent in 2009, with declining sales across all geographic regions. PCs and cell phones together account for approximately 60 percent of worldwide semiconductor consumption. Any significant decline in these two important market segments will have a negative impact on semiconductor sales.”

SIA noted that semiconductor sales remained strong through the first three quarters of 2008 despite growing evidence of a global economic slowdown and declining consumer confidence. “The September sales figures provided the first sign of a slowdown in semiconductor sales,” Scalise continued. “Indications are that both consumer and corporate spending on technology will decline in 2009. Visibility is very limited, and much will depend on how quickly public policy makers can act to restore consumer confidence.”

The semiconductor industry has enjoyed six years of uninterrupted growth since dot.com collapse in 2001. “There are few similarities between 2001 and the current conditions,” Scalise continued. “The collapse of semiconductor sales in 2001 was driven primarily by the implosion of ‘dot.com’ industries which resulted in an enormous inventory overhang. Excess inventory is not an issue today, and the industry is well positioned to resume growth quickly once the current worldwide economic uncertainty subsides,” Scalise concluded.

Regional Market Forecast

The forecast projects growth in all regional markets through 2011. The Asia-Pacific region will continue to be the fastest-growing region, growing from 50.7 percent of global chip sales in 2008 to 52.9 percent in 2011.

More: Webcast slides

See also:
“¢ WSTS Projects 2.5 percent global semiconductor growth in 2008
“¢ Global Semiconductor Market to Contract in 2008, iSuppli Predicts