Holiday Season? Not for Semiconductors companies…

16 December, 2012

The year-end season won't change the worldwide decline in semiconductors sales during 2012. The industry hopes 2013 will be better

The Semiconductors Industry hopes 2013 will be better than 2012

INTEL FAB-18The holiday season is usually the peak of every marketing effort. For years, the semiconductors industry waited patientlessly for the holiday season, hoping for last chance rescue to improve the annual report. But not this year. According to a market report made by IHS iSuppli, weak global economy will cause global semiconductor revenue to shrink by year-end, erasing the gains made by the industry last year.

“Semiconductor silicon revenue will close the year at $303 billion, down 2.3% from $310 billion in 2011. This year will end on a decline, with worldwide semiconductor revenue set to decrease by 0.7 percent in the fourth quarter compared to the third quarter.”

The IHS analysts beleive the prospects brighten next year, with silicon shipments tentatively expected to climb in the first quarter, when companies achieve equilibrium between inventory and demand. That, however, is more than three months away.

The World Semiconductor Trade Statistics (WSTS) organization’s Autumn 2012 global semiconductor sales forecast, which projects that the industry’s worldwide sales will reach $290 billion in 2012 – a 3.2 percent decrease from the 2011 sales total. WSTS projects year-over-year declines for 2012 in all four major regions: the Americas (-4.4 percent), Europe (-10.7 percent), Japan (-2.1 percent) and Asia Pacific (-1.4 percent).

Beyond 2012, the industry is expected to grow steadily and moderately across all regions, according to the WSTS forecast. WSTS predicts 4.5 percent growth globally for 2013 ($303 billion in total sales) and 5.2 percent growth for 2014 ($319 billion). WSTS tabulates its annual forecast by convening an extensive group of global semiconductor companies that provide accurate and timely indicators of semiconductor trends.

This grim oulook is reflected in the prominent semiconductor’s players forecasts. Analog Devices issued a Q1 2013 guidance with expectation for revenue decrease in the range of -6% to -12%. STMicroelectronics announced a new strategic plan: exit the wireless ST-Ericsson to reach a 10% operating margins. ON Semiconductor Q3 sales were $725.5 million, down 3% compared to Q2 of 2012.

Texas Instruments reduced its Q4 2012 revenue goals and announced its restructuring program. It plans to cut 1,700 jobs worldwide, shut down its wireless chip operations, and concentrate on embedded solutions. Even Intel Corp lowered its revenue guidance in the last two consecutive quarters. It seems quite cold out there, in Christmas time.

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