IDC HAS projected that semiconductor revenue will plummet by 22 per cent in 2009.
The research firm attributed the steep plunge to double digit declines in unit shipments, low utilisation rates and price erosion.
 "The semiconductor industry downturn was prolonged by the macro economy. DRAM and NAND markets will stabilise by 2H09 but revenue growth does not return until 2010," Mario Morales, VP for semiconductor research at IDC told The News. "The dedicated foundry market will remain unstable through 1H09, while utilisation rates (are expected to) bottom (out) by the middle of the year. In addition, capital spending will decline by more than 45 per cent this year. Connectivity, mobile internet, multicore processors, and NAND are the key technologies suppliers are investing in."
Morales also explained that 1H09 is expected to be "more severe" than 4Q08 due to business seasonality and current utilisation levels of suppliers.
"Overall capital spending cutbacks match the same level of pull back as last year, which is essential to easing the oversupply (DRAM, NAND, and foundry). Companies with solid leadership and experience and a healthy financial structure will be in the drivers seat when the market recovers. Despite the downturn in the market there are real opportunities for suppliers as the business models, devices, and services continue to evolve," said Morales.
Brianne Lovett, research manager for worldwide semiconductor market forecaster at IDC, concurred, commenting, "The semiconductor market, which is tightly correlated to GDP, will not reach an inflection point until GDP rises and consumer spending rebounds. The semiconductor market will begin to stabilise at the end of 2009 and improve in 2010 with a positive growth rate. However, the market will not rise to the levels seen in 2007 and 2008, until beyond 2011."
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