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Market Researchers Cut Chip Sales Forecast Again

By - Source: IHS | B 7 comments

IHS today said that it expects chip sales to climb by an "anemic" 2.9 percent to $313.3 billion in 2011. Last month, IHS had issued a forecast of 4.6 percent growth.

"Mounting economic weakness is taking its toll on the worldwide electronics and semiconductor industries just as these markets are entering the critical pre-holiday sales season," said analyst Dale Ford. "While economic challenges have persisted into 2011, consumer spending could have still sustained a reasonable level of growth in electronics demand if conditions had remained reasonably stable. Unfortunately, the accelerating decline and instability of the economy has reasserted itself as the primary driver of tepid electronics and semiconductor revenue growth in 2011."

For 2012, IHS expects a ripple effect that will limit sales growth to just 3.4 percent.

According to the market research firm, the timing and weakening growth at this time resembles a scenario of the third quarter of 2008, when the industry dipped into a sudden recession. Back then, semiconductor revenue declined by 5.3 percent in 2008 and by 11.6 percent in 2009. 2011 sales may be saved by "agile adjustments in business strategy" that "may allow semiconductor suppliers to avoid an annual decline in market revenue," IHS said.

If the general economy falls into a recession, however, IHS expects 2011 chip revenue to be flat, an "unstable and volatile semiconductor supply and demand environment entering 2012" and a market that would not recover until 2013. IHS said that it estimates the possibility of a return to recession at 40 percent.

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  • 3 Hide
    mouse24 , September 22, 2011 11:45 PM
    useless info but is bugging my ADD, the cap is slightly bent in the picture
  • 3 Hide
    stingstang , September 23, 2011 12:20 AM
    Sir, we have a problem.
    Are chip sales forcasted to go down next quarter?
    Then it's not a problem!
  • 0 Hide
    eddieroolz , September 23, 2011 12:51 AM
    Is it actually that bad, considering that it's still rising anyway?
  • Display all 7 comments.
  • 0 Hide
    house70 , September 23, 2011 1:25 AM
    This sounds just like the PC doom predictions the other day. Growth is now the new crash. Black is white, up is down.
    What next?
  • 0 Hide
    supere989 , September 23, 2011 7:23 AM
    I think they are basing all their projections on the Apple Computing market.
  • 0 Hide
    alyoshka , September 23, 2011 8:25 AM
    Maybe just a thing to raise the prices of chips again
  • 0 Hide
    cats_Paw , September 23, 2011 8:53 AM
    Lets see: We have a economical recession, a natural dissaster in Japan, and the fact that the industry is growing slower is a "problem".
    Please, someone start to make some news that are not based on the typical "FEAR THIS, FEAR THAT" concept. Its the reason i compleatly stoped watching news in tv, and in fact tv as a whole about 4 years ago.