Semiconductor revenue to decline 0.1 percent in 2011

semiconductor revenue has slowed in 2011, and the market is on pace to have
revenue total $299 billion, a decline of 0.1 percent from 2010, according to


This outlook is
down from Gartner’s previous projection in the second quarter for 5.1 percent
growth this year.


“Three key
factors are shaping the short-term outlook: excess inventory, manufacturing
overcapacity and slowing demand due to economic weakness,” said Bryan
Lewis, research vice president at Gartner.


companies’ third-quarter guidance is well below seasonal averages. The current
guidance by vendors points to flat to down third-quarter growth. Typically, we
see guidance for 8 to 9 percent growth in the third quarter because of
back-to-school and the holiday build. The supply chain is also showing
significant slowdown, and semiconductor-related inventory levels are still
elevated,” Lewis added.


PC production
unit growth has significantly decreased. Last quarter, Gartner estimated PC
production growth of 9.5 percent; that has now been reduced to 3.4 percent.
Gartner has lowered its forecast of mobile phone production unit growth from a
second-quarter projection of 12.9 percent growth to 11.5 percent growth in this
most recent outlook.


DRAM has been
severely impacted by reduced PC demand and falling prices and is now expected
to decline 26.6 percent in 2011. NAND flash and data processing ASIC are the
fastest-growing device areas in 2011, with about 20 percent growth. This growth
is due in part to the strong growth in smartphones and iPads.


“2012 is
the wild card. We have lowered our 2012 semiconductor forecast from 8.6 percent
to 4.6 percent due to a worsening macroeconomic outlook,” Mr. Lewis said.
“However, the odds of a double-dip U.S. recession continue to rise and are
raising fear that sales prospects will deteriorate further. Gartner is closely
monitoring IT and consumer sales trends for any significant signs of


By Team
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