Gartner forecast ridiculous, says Future Horizons

US semiconductor analyst Gartner Dataquest has come up with a forecast of a 16.3% decline for the semiconductor industry in 2009 which European semiconductor analyst Future Horizons describes as ‘ridiculous’.

“Frankly anyone’s number for next year, including ours, is a pure guess. No one in the world has a model. If they say they do they’re lying”, said Malcolm Penn, CEO of Future Horizons. ”The numbers are pure guesswork, there’s no science to them, and no methodology behind them. Everyday a new crook comes out of the woodwork who’s lost tens of billions of dollars. It’s better to say: ‘We don’t know’ than to produce a figure and then try and substantiate it on logical grounds.”

Penn added: “To put a decimal point to a forecast figure in these circumstances is just ridiculous.”

Gartner Dataquest has forecast worldwide semiconductor revenue to fall 16.3 per cent in 2009 to $219.2bn after a 4.4% fall this year. “Never before has the semiconductor industry experienced revenue declines in back-to-back years,” said Gartner.

Gartner expects Q408 sales to show a sharpest-ever quarter-on-quarter decline of 24.4%. The company says its dire forecast is based on the drying up of consumer demand for electronics, ‘from computers to digital cameras’.

Gartner said it expects the semiconductor industry to bounce back in 2010 and 2011, with worldwide semiconductor revenue reaching $251.2bn in 2010, a 14.6% increase from 2009, and in 2011 revenue rising 9.4% from 2010.

At another US semiconductor industry analyst, iSuppli, the forecast for next year is for a 9.4% decline to $241.5bn, down from $266.6bn in 2008.

“The semiconductor industry’s growth cycle is shaped by six primary, interrelated forces: global economic health, electronic equipment production, chip supply/demand balance, capital investment, industry and individual company profitability and competition,” said Dale Ford, senior vice-president for iSuppli.

“All six of these areas will present challenges for the semiconductor industry in 2009, but the global economic crisis is obviously the most significant factor pushing chip revenue growth into sharply negative territory. Given our assessment of the current status of the key forces that shape the semiconductor cycle, iSuppli is projecting semiconductor revenues will decline by 9.4% in 2009. However, there is strong downward pressure on this forecast and there is a possibility that the market decline could be even worse than expected.”

See also: Mannerisms, the blog of David Manners. Updated twice daily, it’s the distinctive, entertaining, authoritative and never dull commentary on the semiconductor industry, from someone who knows. Sign up for the Mannerisms eNewsletter.

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