Global semiconductor revenue has dropped 0.1 per cent in the second quarter of 2011, as demand for PCs continues to tail off, according to Gartner.
The gloomy forecast – equating to $299bn in total – is down from the analyst's previous projection for a 5.1 per cent growth in Q2.
In the first quarter of the year, Gartner estimated PC production growth of 9.5 per cent, but this has since been slashed to 3.4 per cent.
Mobile phone product has also dropped from a 12.9 per cent peak predication to 11.5 per cent growth.
DRAM has felt the biggest impact of the PC slump with falling prices and is now expected to decline a significant 26.6 per cent in 2011.
NAND flash and data processing ASIC was a bright spot with 20 per cent growth, due in part to the increasing demand for smartphones and iPads.
Bryan Lewis, research vice president at Gartner, said: “Three key factors are shaping the short-term outlook: excess inventory, manufacturing overcapacity and slowing demand due to economic weakness.
“2012 is the wild card; we have lowered our semiconductor forecast from 8.6 per cent to 4.6 per cent due to a worsening macroeconomic outlook.
“The odds of a double-dip US recession continue to rise and are raising fear that sales prospects will deteriorate further. We are ensuring Gartner closely monitors IT and consumer sales trends for any significant signs of weakness,” Lewis added.
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