Chip Forecast Reduced Yet Again and Things

One may have thought that the worst of the recession has passed, but this doesn't apply to Europe, not exactly, and the worldwide IT industry is, even now, suffering, as found by analysts.

Market analysts no doubt love it when they can say one or more fields of the industry are doing well.

Unfortunately, the past year did not really give much reason for joy, especially on the IT market.

While some market segments did hold out, and some companies thrived, there was almost always at least a passing mention of how things really could have been much better.

Now, IHS / iSuppli found itself forced to reduce its semiconductor growth forecast for the year 2011.

Though there is the silver lining that 2011 will be, overall, better than 2010, optimism has been, and still is, dwindling.

Revenue will rise by just 2.9 percent, to $313.3 billion, which is the rough equivalent of 230 billion Euro.

Just a month ago, the forecast was of 4.6 percent, but consumer pessimism and hiking economic troubles had a different say in the matter.

“Mounting economic weakness is taking its toll on the worldwide electronics and semiconductor industries just as these markets are entering the critical pre-holiday sales season,” said Dale Ford, vice president, electronics supply chain and semiconductors for IHS.

“While economic challenges have persisted into 2011, consumer spending could have still sustained a reasonable level of growth in electronics demand if conditions had remained reasonably stable. Unfortunately, the accelerating decline and instability of the economy has reasserted itself as the primary driver of tepid electronics and semiconductor revenue growth in 2011.”

Needless to say, the DRAM problems are one of the major causes behind this downturn.

“With the memory of the painful market contraction of 2008 and 2009 still fresh in mind, participants in the semiconductor supply chain are taking defensive postures and working to reduce inventories and production levels.”