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Economic conditions loom large on semiconductor growth, warns iSuppli

09 October 2008 | By Mark Osborne | News > Fab Management

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iSuppli Corp trims its industry growth forecast to 3.5 percent in 2008Should global economic conditions worsen then the semiconductor industry could face a greater risk to revenue growth in 2008 and onwards, according to market research firm iSuppli Corp, as it trims its industry growth forecast to 3.5 percent, or $280.1 billion for the year. Only in August, iSuppli was projecting growth of 4 percent for 2008, Only in September did the signs of a slow-down start to permeate the industry, noted iSuppli.

“The credit crisis is impacting the semiconductor market on several levels,” said Dale Ford, senior vice president, market intelligence, for iSuppli. “The first level is demand for electronic equipment from the Wall Street firms themselves, which is expected to drop and thus decrease demand for semiconductors. The second level, and a much more significant factor, is the impact on corporations in general. With companies unable to get credit, the crisis could spread to the wider economy, impacting demand for electronic equipment and semiconductors. The final level, and the most significant area of impact, is the broader effect on consumer confidence and spending if the overall economy collapses.”

Not surprisingly, iSuppli noted the drag on revenue for the industry as a whole, caused by the overcapacity in NAND and DRAM, which has seen massive price declines in 2008. Its 2008 semiconductor memory revenue forecast was lowered by 5.8 percentage points, and its DRAM outlook by 5.4 points.
One noted good spot is Application Specific Standard Product (ASSP) semiconductors, as the market research firm raised its 2008 ASSP revenue forecast by 3.2 percentage points for the year.

Things could be worse if what not for the PC market, iSuppli expects 12.5 percent growth in PC unit shipments in 2008.

iSuppli Corp trims its industry growth forecast to 3.5 percent in 2008

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