Semiconductor Market Declines Less than Expected, Says iSuppli

Nov 24, 2009 16:56 Nikkei Electronics Asia

Although the global semiconductor industry has little to cheer about in 2009, with revenue dropping by 12.4% and only one of the top-10 suppliers achieving growth for the year, there is one source of solace for the battered chip makers: it could have been much worse, according to iSuppli.

"The year 2009 will be remembered as one of the most dismal years in the history of the global semiconductor business, with a plunge of more than US$32 billion in revenue compared to 2008," said Dale Ford, senior vice president at iSuppli Corp. However, iSuppli's preliminary estimate of 12.4% is far better than expectations from early 2009 of a more than 20% plunge.

"There was little room for anything but pessimism after the industry suffered a sequential revenue decline of 21.4% in the fourth quarter of 2008 and an 18% drop in the first quarter of 2009. However, semiconductor sales rebounded smartly after that, with sequential increases of more than 18% in the second and third quarters and an expected 5% rise in the fourth quarter. This strong rebound means 2009 will be much less painful than had been feared earlier in the year."

The better-than-expected results in 2009 are attributable to a surprisingly strong performance in the memory market as well as in sales of chips for consumer electronics and wireless products.

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