A sustainable recovery is about a year away, with sales growth
expected to follow, according to a report out from
Gartner
yesterday.
The research company said that electronic equipment markets should
begin a recovery in Q4 of this year, allowing the electronics
industry to enter into a sustained recovery - as measured by a
rolling 12-month comparison with the prior year - in the second
half of 2010 with a reacceleration in sales in 2011. That will not
happen, however, until all electronics markets hit bottom.
"Almost all sectors of the electronic equipment market are still
declining, and we will need to see markets hit bottom before we see
the waves of recovery and a rebound to positive growth," said Klaus
Rinnen, managing VP at Gartner's semiconductor manufacturing group,
in a statement this morning. "The wider process of rebounding will
occur over a period of approximately two years."
Rinnen said the PC market is already reaching the bottom of its
growth pattern, but noted that the majority of electronics segments
will not reach bottom until the second half of 2009. Until then,
uncertainty will remain high and visibility low. Rinnen also warned
that there is a less-likely possibility of a W-shaped recovery
pattern - one with an up and down pattern - that could push
sustainable growth into 2011.
"Although there are signs that the market will improve over the
next few years, we do not expect semiconductor sales to regain the
2007 peak sales levels during the current five-year forecast
period, ending in 2013," said Jim Tully, VP and distinguished
analyst at Gartner, in the statement.
Gartner anticipated that PCs and mobile phones will be among the
lead segments to bottom out and start the charge for the recovery.
However, the company warned that although improvement in
electronics inventories, in combination with government stimulus,
will likely put a halt to the current slide in the market, the
question is one of timing between these two events.
Gartner said that if economic growth and government stimulus are
slow to materialize, the electronics industry could see a demand
and production lift followed by a languishing demand period and
even a risk of overproduction in mid-2009. "Such events could not
only delay the bottoming of segments, but also force a second and
lower bottom for the PC market," Gartner said.
Mobile phones are expected to be the first market to achieve a
sustainable recovery, edging PCs by about one quarter, Gartner
projected, adding that for the industry as a whole, sustainable
recovery will take longer as higher-priced and highly
consumer-dependent segments are delayed.
"The semiconductor industry must prepare itself for significant
changes in consumer buying behavior, technology demand patterns and
the supplier landscape," said Tully. "The current recession is
pushing many suppliers to the brink of ruin, and several will not
survive. The emerging supply chain will be leaner and stronger, but
while it reshapes to the new market realities, industry
participants are exposed to considerable vendor
vulnerabilities."
By Suzanne Deffree, Managing Editor, News -
Electronic News
See also:
Credit Crunch: Semiconductor light amid economic
gloom, in which Electronics Weekly
highlights some recent stories that run counter to the prevailing
industrial outlook.