Global chip and electronics sales slump

Global semiconductor and electronic equipment suppliers are feeling the pressure of the economic downturn with many already facing slowing demand in 2008, new research reveals.

iSuppli estimates that five of the six major segments of the global electronic equipment business – computers, industrial equipment, automotive gear and wired and wireless communications – will suffer lower growth in 2008 than they did in 2007.

This 'widespread slowdown' will hold worldwide Original Equipment Manufacturer (OEM) revenue expansion for all types of electronic equipment to 5.9 per cent, down from 7 per cent in 2007. iSuppli previously predicted 6.6 per cent growth in 2008.

According to the market intelligence firm, this will have a negative impact on semiconductor sales, which now are expected to rise only 4 per cent to reach $279.6bn in 2008, up from $268.9bn in 2007. iSuppli's previous semiconductor forecast called for 7.5 per cent revenue growth in 2008.

"Revenue growth in each electronic equipment segment is being impacted by a variety of specific factors. However, the macroeconomic impact of the US subprime mortgage crisis is the underpinning of the market slowdown,” said Gary Grandbois, principal analyst with iSuppli.

"The global electronic equipment market has posted five strong years of growth in a row. But weakness in some application markets coupled with a slowing trend in global economic conditions, led by a US slump, dim the prospects for strong equipment growth in 2008."