Semiconductor sales expected to dip next year

Semiconductor sales are expected to drop next year for the first time since the last time the industry hit the skids in 2001.

The warning has come from the Semiconductor Industry Association (SIA) which forecast a 5.6% fall in sales next year. Declines in both PCs and mobile phones will be responsible for the drop.

"The current global economic turmoil is clearly having a significant impact on semiconductor sales," said SIA President George Scalise. "The fortunes of the semiconductor industry are increasingly tied to consumer spending on electronic products. Consumer purchases now drive well over half of worldwide semiconductor sales."

He added that the first three quarters of this year had been strong but from September it was clear problems were emerging.

"The September sales figures provided the first sign of a slowdown in semiconductor sales," he added.

The SIA has been able to record six years of uninterrupted growth but Scalise said that the current situation was not going to be as bad as the last downturn.

""The collapse of semiconductor sales in 2001 was driven primarily by the implosion of 'dot.com' industries which resulted in an enormous inventory overhang. Excess inventory is not an issue today, and the industry is well positioned to resume growth quickly once the current worldwide economic uncertainty subsides."