Processor sales set to slump in 2009

Global sales of semiconductors are likely to fall 2.2% in 2009 due to weak demand for electronics worldwide, according to industry group World Semiconductor Trade Statistics (WSTS).

Processor sales set to slump in 2009

As recently as May, the group had forecast growth of 5.8% in 2009. But chip giants Intel and Samsung are steeling themselves for weak computer sales in the Christmas season and beyond as the economic crisis hits consumer sentiment.

The chip market will shrink to $256 billion next year, down from an expected $261.9 billion in 2008, said WSTS, whose 66 member chip makers make up roughly 80% of the global chip market.

Semiconductor companies worldwide are cutting output and capital spending. Taiwan Semiconductor Manufacturing Co, the world’s largest contract chipmaker, has implemented a hiring freeze after posting its biggest decline in monthly sales.

Sales of microchips are expected to fall 9.8% in the Americas next year, trailed by a 3.8% decline in Japan and a 3.6% fall in Europe, the WSTS says.

Sales in the Asia-Pacific region will slow to 1.1% growth in 2009, down from an expected 7.6% growth this year.

The industry group also cut its outlook for 2008 and 2010. Chip makers now expect sales to grow an annual 2.5% in 2008, down from a previous outlook of 4.7%, as sales stall before the year-end and inventory piles up, lowering prices.

The industry group also revised down its forecast for 8.8% growth in 2010 to 6.5% growth.

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