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2010 to see 17% jump in semiconductor industry revenue, Databeans estimates
While this industry recession shows some similarities to the one that occurred in 2001, when semiconductor sales plummeted by 32.5% and took nearly three years to return to 2000 levels, Databeans reports this crisis will be far shorter lived.
By Suzanne Deffree, Managing Editor, News -- Electronic News, 4/20/2009
Databeans today became the most recent market research company to release a somewhat optimistic view of the semiconductor industry's growth potential over the next few years.
Admitting that the chip market slipped 3% year over year in 2008 to $248.6 billion in sales and forecasting it will in 2009 record revenue of just more than $200 billion -- which was the approximate size of the market nine years ago in 2000 -- the company said that this downturn will be much different than the fall of 2001.
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Databeans reported that the current crisis has been caused primarily by temporary macroeconomic issues that have impacted consumer spending on devices that use ICs and will recuperate at a much faster rate than the 2001 fall did. Indeed, the company estimated that after a 17% semiconductor industry sales decline in 2009, a “v-shaped” or “boomerang” recovery will come to the industry in 2010, with a total year-over-year increase of 17% expected next year. (See chart below.)
Databeans further predicted that by 2011, total IC sales will regain momentum and surpass the peak seen during 2007, with $269.1 billion in revenue. "We believe that the market reacted swiftly to the financial meltdown and that with little inventory in the channel now, production will begin to flow again and not remain stagnant as it did in 2002," Databeans said. "This improved situation isn’t likely to happen all at once, but certain indicators show that recovery may be sooner than expected.
Among the indicators Databeans noted were the handset industry and China's influence. The handset segment, a traditional bellwether for overall semiconductor health, is estimated to have lost nearly 20% of its sales in Q1, but Databeans noted that that was still considerably better than the 35% decline it experienced in Q4 2008. The company said it believes leading handset supplier Nokia is still selling well, particularly in smartphone category, which is expected to perform fairly well throughout 2009. Nokia’s key chipset supplier, Texas Instruments, announced better than expected sales for the last two months, Databeans further noted.
Databeans also pointed out that China's industrial output growth jumped 8.3% in March, up from the 3.8% rise of the first two months, as domestic demand continued to improve. "With low penetration rates for consumer electronics, mobile handsets, and laptop computers, combined with strong cash savings, increasing Chinese consuming habits will likely be a key factor in worldwide recovery," Databeans said.
The company also said China’s technology companies have done surprisingly well during Q1.
"Ultimately, a combination of factors will lead to a gradual recovery in both pricing for ICs and consumer spending habits," Databeans said. "This year will still be a difficult journey for many OEMs and semiconductor suppliers, with consolidation, reduction, or restructuring on the horizon. Ultimately, Databeans views the situation as troubled, but still showing signs of improvement."
Worldwide semiconductor industry revenue
Source: Databeans, April 2009
