Semiconductor sales in trouble

The chips are down...

The semiconductor market is battered and bloody, after taking a direct hit from the credit crunch, according to market research outfit, In-Stat, which reckons IC revenue will fall by almost 20 per cent in 2009 to $199.2 billion.

Scottsdale, Arizona based In-Stat released a depressing report today, entitled Down Economy = Bloody 2009 Semiconductor Market, claiming the industry would not make a recovery to its former 2007 glory until well into 2012.

One of In-Stat's boffins, Jim McGregor, noted, ''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".

Indeed, In-Stat predicts that although some recovery is predicted for the second half of 2009, revenue growth in 2010 will be modest, at 11.8 per cent.

''Restoring consumer and business confidence and overcoming excess capacity will be key to recovery and subsequent growth,'' noted McGregor.

In-Stat's report also reckons that fab capacity utilisation, which peaked at 90 per cent early in 2008, slumped to 87 per cent in the third quarter of last year.

The pessimistic prognosis according to In-Stat's stats? Things don't look good and semiconductor firms can expect to see plenty of mergers, acquisitions, bailouts, restructuring, and other unpleasant realignments in their near future.