Deeper recession set to end in 2010, claims SIA

But short-term forecasts predict that a dismal year lies ahead for the global semi-conductor sector

George Scalise: Our fortunes are tied to consumer spending

The recession is far worse than anticipated, but will be over by late-2009, according to new figures from the Semiconductor Industry Association (SIA).

The SIA’s annual forecast of global semiconductor sales makes gloomy reading, mooting the first decline in sales since 2001.

Although the recession arguably started in 2008, sales forecasts are still 2.2 per cent up on the same period in 2007.

However, sales in this quarter are predicted to fall by 5.9 per cent on this time last year. Crucially, this is historically a strong quarter for the microelectronics industry, with product launches timed to coincide with the Christmas season.

Business will get a lot worse next year, according to SIA predictions. Based on its projected sales figures, 2009 will see a decline of 5.6 per cent to $246.7bn (£167bn).

“The global economic turmoil is clearly having a significant impact on semiconductor sales,” said SIA president George Scalise.

“Our fortunes are tied to consumer spending, which now drives more than half the world’s semiconductor sales.”

However, the SIA anticipates growth will resume in 2010. Sales will increase by 7.4 per cent in 2010 to $264.9bn and by 7.5 per cent in 2011 to $284.7bn.

Despite this, UK players were not impressed. No one really knows when a recession will end, said Enta Technologies business manager Mike Barron.

A better approach would be to find solutions suited to the current climate, he argued.

Meanwhile, Enta Technologies and Nvidia joined forces with dealer group Brigantia to create a new theme for Brigantia’s annual industry event, which took place last week.

The roadshow demonstrated how vendors will work with the channel in the future. The emphasis was on repairing and upgrading systems for end users, rather than trying to sell them new ones.

“Tweaks and upgrades save a customer money and actually offer the system builder a better margin,” explained Barron.

“Putting in new memory, or a new GPU, often adds a lot more value and saves them the time it would take to reconfigure a new system.

“The large vendors, such as Microsoft, are increasingly interested in the independents. The days of chucking out a system and buying a new one are over,” he added.