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iSuppli Corp., has revised its 2008 outlook for the semiconductor industry, joing Gartner Dataquest in projecting negative growth for 2008 over 2007. Global semiconductor revenue now is expected to decrease to $266.6 billion for the full year 2008, down 2 percent from $272.0 billion in 2007. . iSuppli's previous forecast, from September, called for 3.5 percent growth and similar to that of Gartner’s.

“The first evidence that the semiconductor industry was entering a recession arrived in the third quarter, before the financial crisis began sweeping the world in October,” said Dale Ford, senior vice president, market intelligence services for iSuppli. “iSuppli previously had predicted that the third quarter would generate 7.9 percent growth in semiconductor revenue compared to the second quarter. However, actual growth in the third quarter came in at a very anemic 2.5 percent quarter-to-quarter rise. Year-over-year revenue in the third quarter was down by 2.9 percent.”

The attached figure presents iSuppli's forecast for global semiconductor sequential revenue growth by quarter for the period of 2007 through 2008. The revised semiconductor forecast was based on actual third-quarter quarter results of 121 leading semiconductor suppliers and on fourth quarter revenue estimates founded primarily on financial guidance provided by the major chipmakers.

The market research firm cited rapidly deteriorating market conditions for the growth revisions as well as continued ASP declines in the memory markets.

“Memory suppliers are suffering the most severe declines. iSuppli expects the negative momentum to continue into the fourth quarter with the overall market expected to decline by 8.8 percent compared to the third quarter of 2007, or a 10.9 percent reduction compared to the fourth quarter of 2007,” noted Ford.