Current situation in semiconductor market

Global Semiconductor Market:

The global economy is entering a period of unprecedented uncertainty, driven largely by the crisis in subprime home mortgages here in the United States. The resulting credit crisis has impacted all segments of the economy. With more than half of all semiconductor demand driven by consumer purchasing, this crisis has the potential to impact semiconductor demand going forward.

As the economic situation began to unfold early in the year, the SIA’s June mid-year forecast lowered the projected sequential growth rate to 4.3% and total sales of $266.6 billion. Rapid price attrition in DRAM and NAND flash products dampened overall industry growth despite healthy demand from key end-markets, including personal computers, cell phones, and consumer devices such as personal media players, digital TVs and digital cameras.

Semiconductor sales through August of this year are closely tracking the June forecast at 4.5% growth year to date. The current turmoil in worldwide financial markets greatly complicates forecasting sales for 2009 and beyond. Restoring consumer confidence and improving the lending environment will be the key to growing semiconductor sales in 2009.

- SIA Annual Industry Forecast