The chip industry will suffer back-to-back years of lower revenue for the first time in its history in 2009, a technology research group said Tuesday.
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Gartner Inc. projected that chip sales will total $219.2 billion next year, down 16.3% from 2008, as the industry reels from the severe downturn, marked by slumping personal computer sales and a marked decline in consumer spending.
"Never before has the semiconductor industry experienced revenue declines in back-to-back years, but this will occur in 2009," the industry group said.
Gartner had earlier said that, based on a preliminary tally, chip sales for 2008 will total $261.9 billion, down 4.4% from 2007. It was only the fifth time in the past 25 years that chip sales fell from the previous year. Read more.
Gartner had forecast in mid-November that chip sales would grow 0.2% in 2008, and drop 2.2% in 2009.
"However, the financial crisis is having an unprecedented negative impact on fourth-quarter 2008 sales and profits," the groups said.
The industry group said chip sales will fall a record 24.4% from the previous quarter, surpassing the 20% record drop in the second quarter of 2001.
In a prepares statement, Bryan Lewis, Gartner's research vice president, said, "This downturn is broad-based, not limited to only technology, has a much different growth profile before the downturn, and has far less inventory buildup. Inventory levels this time have been monitored and more tightly controlled throughout the entire food chain, and this will help the market come back more quickly than in 2001."
Major chip makers have recently lowered their quarterly forecasts, including Intel Corp., Advanced Micro Devices Inc.and Texas Instruments Inc..
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By Benjamin Pimentel
Source: MarketWatch
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