Worldwide semiconductor revenue to fall 18%
15 April 2009
News
According to Databeans, worldwide semiconductor revenue came in at $247 billion for 2008 – a 3% loss from 2007. This year, with the combined financial crisis and unseasonal and dramatic drop in orders in November and December, it will take some time before growth is again seen in the chip market.
The current model is predicting a contraction of 18% for 2009, resulting in a total available market of $203 billion by the end of the year. This forecast is in line with every other bad economic story in the news these days, but there are some markets that are expected to bring a touch of sweetness to an otherwise sour semiconductor industry.
A few product categories that are expected to remain immune from the woes of the other markets, such as Flash, DRAM and microprocessors, are the same products that are providing a lot of return and at a sweet deal. Accelerometers, small circuits that are used to orient handheld screen images and transmit movement in game controllers, are expected to gain momentum this year. For a meagre $1,50, application engineers are including these circuits in high-end products that may have to wait until next year for recovery, and in low-end products that should do well this year, such as the upcoming sub-$100 Apple iPhone. The added utility the technology brings to users far outweighs the cost of integration. Capacitive sensing used in touch screens is another technology that should also do well this year for the same reasons.
Aggressive pricing for new technology should also provide stimulus to select product markets in 2009. While many semiconductor product prices are expected to see moderate inflation in 2009, after a freefall in 2008, such as in the memory category, there are a few categories where price has been aggressively falling, causing a shift in demand. Key wireless and video product areas should respond here as suppliers compete for precious available market share.
Longer term, Databeans expects the chip market to bottom out mid-year and begin recovering. It expects considerable inventory replacement for analog and ASSPs, with focus on amplifiers, power and transceivers specifically. Further down the road, the digital markets should follow suit, although the competitive landscape is expected to look substantially different by that time.
For more information visit www.databeans.net
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