Blog Post

Chip Industry to See Slow Recovery in 2010

[qi:gigaom_icon_chip] The Semiconductor Association has lowered its chip forecast for the year, saying it now expects the sale of semiconductors to fall by 21 percent from 2008 to 2009. The revised numbers shave $53 billion off the previous 2009 forecast, issued by the SIA in November, when it predicted sales would fall by 5.6 percent. The estimated 2009 sales of $195.6 billion for the year are in line with other data provided by the industry. Earlier this week, the World Semiconductor Trade Statistics organization said it expected sales of $194.8 billion, resulting in a 21.6 percent decline from last year.

The SIA also revised its 2010 and 2011 forecasts downward. It sees revenue of $208.3 billion in 2010 vs. its fall prediction of $264.9 billion. Things get slightly better in 2011, when it thinks sales will hit $221.9 billion, though that’s down from previously anticipated sales of $284.7 billion. The growth rates associated with these forecasts are less than 10 percent a year, indicating that the recovery will be dampened by firms selling cheaper chips, such as Intel’s (s intc) Atom, which can cost almost 10 times less than Intel’s processors for notebooks. That’s good for consumers, who get cheaper gear, but not something the chip industry is going to cheer.

wstsChart courtesy of the WSTS.