Semiconductor sales are set to rebound

ALTHOUGH SEMICONDUCTOR sales have tanked in recent quarters, revenue levels are set to rebound to 2008 levels in 2010, according to analyst firm Gartner.

According to Gartner's '4Q09 Semiconductor Forecast Update', 2009 worldwide semiconductor revenue should hit $226 billion, an impressive figure on its own, but just over 11 per cent less than 2008's $255 billion revenue. The good news is that this is significantly better than the 17 per cent slide predicted earlier in the year by Gartner, and the better news is that the analysts expect next year will see these revenues rise once again.

"The most significant changes for the semiconductor industry came from application-specific standard products (ASSPs), memory and compute microprocessors, as all three products benefited from a strengthening PC market," said Bryan Lewis, research vice president at Gartner.

"ASSPs and memory, primarily NAND flash, also benefited from an improved outlook for cell phones. The revenue forecast for the commodity memory market - DRAM and NAND flash - has improved because of the stronger demand outlook, which means that pricing has strengthened more than previously forecast."

Lewis reckons that PC unit growth projections have improved dramatically from double-digit declines seen at the start of the year making it the single largest application driving the semiconductor rebound.

With PCs driving the recovery, microprocessors and DRAM are now two of the most-noteworthy device categories of 2009.

"Both device types experienced lower revenue declines than the industry average, and DRAM began to be profitable for some vendors in the third quarter of 2009 after almost three years of losses," added Lewis.

"While most of the news has been positive to date, recent channel checks in Taiwan indicate there is concern that PC orders are slowing earlier than the seasonal norm and that 2010 may get off to a slow start."

It is hoped that the recent release of new operating systems such Windows 7, Snow Leopard and several Linux based platforms, combined with the upcoming festive season could help spur revenues further in this sector. µ