News Article
2005 slowdown will be mild says analyst
The Semiconductor Industry will "enter another slump" in 2005 following record revenues in 2004, warns market analyst In-Stat in its annual Semiconductor Product Market Forecast report.
The Semiconductor Industry will "enter another slump" in 2005 following record revenues in 2004, warns market analyst In-Stat in its annual Semiconductor Product Market Forecast report.
The Arizona-based company is forecasting a 5.7% fall in semiconductor revenues to US$199.3 billion. This compares with 27.0% growth in 2004 to US$211.4 billion, a new record.
The slowdown in 2005 will be less severe than in previous cycles, believes Frank Dickson of In-Stat, "because it is taking place within a relatively strong worldwide economy, which is expected to grow by 4.3% in 2005".
However, he warned that if the global economy was to falter, the semiconductor sector could be hit hard.
"There are risks to the economy, such as petroleum prices remaining high, Middle East tensions not easing, and/or interest rates rising too rapidly. These risks could result in slower economic growth and a deeper and/or longer semiconductor downturn."
In-Stats analysis of the market suggests that the semiconductor industry will return to growth in 2006. This expansion will then continue through to through 2008, before the industry suffers another mild downturn in 2009.
The company also suggests that growth in the sector will not be led by a killer application (like PCs and mobile phones in the past) but by a "diverse" range of consumer-orientated products.
This greater diversity will make industry revenues more stable, In-Stat believes.
The Arizona-based company is forecasting a 5.7% fall in semiconductor revenues to US$199.3 billion. This compares with 27.0% growth in 2004 to US$211.4 billion, a new record.
The slowdown in 2005 will be less severe than in previous cycles, believes Frank Dickson of In-Stat, "because it is taking place within a relatively strong worldwide economy, which is expected to grow by 4.3% in 2005".
However, he warned that if the global economy was to falter, the semiconductor sector could be hit hard.
"There are risks to the economy, such as petroleum prices remaining high, Middle East tensions not easing, and/or interest rates rising too rapidly. These risks could result in slower economic growth and a deeper and/or longer semiconductor downturn."
In-Stats analysis of the market suggests that the semiconductor industry will return to growth in 2006. This expansion will then continue through to through 2008, before the industry suffers another mild downturn in 2009.
The company also suggests that growth in the sector will not be led by a killer application (like PCs and mobile phones in the past) but by a "diverse" range of consumer-orientated products.
This greater diversity will make industry revenues more stable, In-Stat believes.
