Semiconductor revenue falls for first time in two years

Semiconductor revenues fell in the last quarter of 2010 for the first time in 24 months, according to the latest figures from IHS iSuppli.

The 3.7 per cent decline was the first since the start of 2009, and was identified in studies of 298 semiconductor firms, the analyst firm explained.

Sales dropped from $80.1bn (£50bn) in the third quarter to $77.2bn (£48bn) in the fourth quarter, but still led to higher revenues. IHS iSuppli said that revenues, although depressed, were 11.9 per cent up on the fourth quarter of 2009.

"Following steep declines of 21.4 per cent in the fourth quarter of 2008 and 18 per cent in the first quarter of 2009, semiconductor revenues began to increase in the second quarter of 2009 and then rose every quarter until the fourth quarter of 2010," said Dale Ford, an analyst at IHS.

Ford added that 2010 revenes were approximately £50bn higher than in 2009.

Semiconductor sales could be shaken further this year as the fallout from the earthquake in Japan is felt at manufacturing plants.

IHS iSuppli said last month that the earthquake had damaged two major manufacturing plants in Japan that produce a quarter of the silicon wafers used in the manufacturing process.

The ongoing problems in Japan are expected to create a shortfall in seminconductor inventory and could delay the release of other hardware, the analysts warned.