The Semiconductor Industry Association on Friday projected a precipitous drop in semiconductor sales this year, with a slow recovery starting as soon as next year.
SIA projected worldwide semiconductor sales of US$195.6 billion this year, a 21.3 percent drop from sales of $248.6 billion in 2008. This is close to a fourfold change from projections SIA made in November of sales declining by 5.6 percent in 2009 before resuming growth in 2010.
The industry will gradually rebound in 2010, with a 6.5 percent increase in sales year-on-year to $208.3 billion, followed by 6.5 percent growth in 2011 to $221.9 billion, SIA said. SIA originally projected 2010 sales to grow 7.4 percent growth, and 7.5 percent growth in 2011.
The association was "overly optimistic" when it made the original projection last November, said John Greenagel, an SIA spokesman. The projections were made before global economies hit rock bottom and consumer spending stalled. Semiconductor sales since then have sharply declined, he said.
Semiconductor sales declined by 30 percent year-over-year for the fourth quarter of 2008, with 2009 first quarter sales falling by 29.9 percent.
But now the rate of decline has slowed as purchases of devices like PCs and cell phones pick up, so it's not exactly gloom and doom going forward, Greenagel said. PCs and cell phones account for 60 percent of semiconductor sales, he said.
Semiconductors include processors and storage devices like flash memory that go into devices such as PCs, cell phones and automobiles.