(November 18, 2008) STAMFORD, CT — Following 3Q earnings reports of companies in the semiconductor assembly and test services (SATS) industry, Jim Walker, analyst, Gartner, reports yet another decline in projected sales to between 8% and 20% in the 4Q08. Walker cites the world financial crisis as the primary cause of the drop.
Changing market conditions prompted Gartner to update its semiconductor market forecast last week. Walker states that they now expect overall growth to be between 1% and 2%. For 2009, semiconductor market’s growth is expected to range from -2% to 1%.
Within the SATS sector, slowdown was already underway in September, While the financial with the downturn beginning in the last weeks of July and in early August, noted Walker. Warning signs appeared when ChipMOS’ year-over-year (YoY) earnings for July and August decreased 18.5% and 24.4%, respectively. For the same period of time, SPIL and ASE also announced a decline of 1.8% and 5.3%, respectively), as well as a decline in YoY sales for September 6.9% and 15.1%, respectively, along with a drop in utilization rates.
Walker says that while both SATS and semiconductor companies met 3Q08 expectations, guidance for the fourth quarter dropped precipitously. Because of these events, Gartner reports it has revised its forecast for the SATS industry. For 2008, the expected year-end growth for the market growth will be 1.6%, with an additional 4% decline for the SATS industry in 2009.