17% drop in the semiconductor revenue in 2009

The global semiconductor revenue is on course to total $212 billion in 2009, which is a 17.1 percent decline from 2008 revenue of $255 billion reveals a report. The report by research and analysis firm Gartner says that the projection is better than the second quarter projections of a 22.4 percent decline, which shows signs of recovery in the market.

Some of the major semiconductor vendors have reported positive second quarter sequential revenue growth. Intel posted 12 percent revenue growth, while Samsung announced its revenue increased by 30 percent and Qualcomm reported a 35.7 percent increase in its mobile chip sales. "The semiconductor market has performed better than expected, as was evident when second quarter semiconductor revenue increased 17 percent in sequential sales," said Bryan Lewis, Research Vice President at Gartner.

The increasing demand for products using semiconductor was the key driver behind the growth in the market. "Consumers reacted strongly to reduced PC and LCD TV pricing as price elasticity was amazing. The industry also benefited from the China stimulus package that worked remarkably well to boost short-term demand. Governments worldwide took action quickly and extensively to avoid a meltdown and it worked," added Lewis.

Though, the outlook for 2009 has improved, Gartner also points out that all major segments of the semiconductor market are expected to report double-digit revenue declines this year. The application-specific standard product (ASSP) - the largest segment in the semiconductor market - will touch $57.2 billion in 2009, a decline of 16.5 percent over last year's revenue. The memory market is predicted to total $41 billion with a 13.5 percent decline and the microcomponents segment is forecasted to reach $39.4 billion in 2009, a 19.2 percent decline from 2008.

According to Lewis, foundries are concerned that demand may drop off more than seasonal in the fourth quarter, and it may carry into first quarter 2010. Gartner's most likely scenario is a negative five percent growth in the first quarter of 2010, as customers take a break and absorb all the devices they purchased over the previous three quarters.

Agencies