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iSuppli warns of trouble for chips

Microscope contributor

Technology market intelligence specialists iSuppli has adjusted its forecast for 2008 worldwide semiconductor growth downward from 4% to 3.5%, but is warning that the chip market could be in for a rough time if economic conditions continue to worsen.

Total global sales are expected to hit $280.1bn in 2008, however according to iSuppli signs began to emerge last month that the semiconductor market was starting to feel the crunch.

Senior vice president of market intelligence at iSuppli, Dale Ford, claimed that there were several factors at play in the market.

Ford said: “The first level is demand for electronic equipment from Wall Street, which is expected to drop and thus decrease demand.The second, 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 most significant area of impact, is the broader effect on consumer confidence and spending,” he continued.

Of particular concern to analysts of late has been the downturn in sales of memory, specifically DRAM, where iSuppli has cut its forecast revenues by over 5%.

This backs up last month’s alert from Toshiba, which claimed significant price erosion on memory was beginning to hurt its sales figures.

ISuppli’s market update comes just days after AMD split offits chip-building activities into a new unit called The Foundry Company, after receiving a multi-billion dollar injection from the UAE.

Related Topics: Desktop PCs, VIEW ALL TOPICS

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