Semiconductor Sales Growth Slower Than Expected

Global semiconductor revenue growth this year will be slower than previously expected, as weaker-than-expected demand for personal computers and other consumer-electronic devices will cause inventory to pile up, iSuppli said in a statement today.

Semiconductor revenue in 2010 will be $302 billion, which will still be a 32% increase from 2009, but less than the 35% growth rate previously forecast by iSuppli. Fourth-quarter semiconductor sales will be slightly less than the third quarter, marking the first sequential revenue decline in almost two years, iSuppli said.

"There has been a significant slowdown in the second half in consumer demand for some electronic devices, including PCs," said Dale Ford, senior vice president at iSuppli, in the statement. "Meanwhile, inventories have been building throughout the semiconductor supply chain."

Weaker personal-computer demand has been felt by everyone from chipmakers to manufacturers of personal computers and other devices. Earlier this month, shares of computer makers Intel Corp. (INTC) and Hewlett-Packard Co. (HPQ) were downgraded by UBS because weak demand will force the companies to cut prices, which will reduce profit margins.

Last week, computer-chip maker Advanced Micro Devices (AMD) lowered its third-quarter sales forecast, citing weaker-than-expected demand for laptops in North America and Europe.


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