Feb. 2, 2009 – For the ninth time in 10 years, Punxsutawney Phil is predicting six more weeks of winter. If only the semiconductor industry had such easy visibility.
Global semiconductor sales fell off a cliff in the month of December to $17.4B, down -16% vs. November and -22% from Dec. 2007. (In Nov. chip sales were down about -7% M-M and -10% Y-Y.) For the full year 2008, global chip sales were off by -2.8% to $248.6B — the first Y-Y drop since 2001. November results had tracked yearly growth to essentially flat,, vs. the SIA’s estimates of 2.2% growth.
We’re in “an unprecedented period of uncertainty,” lamented Scalise. With more than half of total chip sales driven by consumers, “the fortunes the fortunes of the chip industry are increasingly linked to macroeconomic conditions such as GDP, consumer confidence, and disposable income.” Thus, industry recovery “will depend greatly upon whether US economic recovery efforts still being hashed out can “restore consumer confidence, improve liquidity, and stimulate economic growth.”
Demand weakened for all major drivers of semiconductor sales, from auto to PCs to cell phones and corporate IT purchasing, noted SIA president George Scalise.
By geography, no region was spared punishment, with the Asia-Pacific (-20%) and Europe (~20%) hit hardest vs. the prior month, and all regions but Japan (-13%) were in the -20% to -27% range vs. a year ago. The three-month rolling average, comparing 4Q to 3Q, most clearly shows the rapid onset of decaying conditions — Asia-Pacific chip sales were down -30%, Europe -27%, Americas -16%, Japan -12%.