Plunge Predicted for Semiconductor Sales

Semiconductor sales worldwide will plunge 26% this year, more than previously expected, because demand for computers and cell phones hasn’t picked up yet, market researcher Dataquest Inc. said.

Revenue will fall to $168.1 billion from $226.5 billion last year, Dataquest said. The firm previously had forecast a 17% decline and said today that if conditions get worse, the drop might hit 29%.

“We are faced with a worldwide semiconductor market downturn that decimated two years of industry growth,” the researcher wrote in a note to clients. “We see minimal recovery for the industry during the second half of 2001.”

Some companies hit bottom during the second quarter, and the main trough for the chip industry will come during the September period, Dataquest said.

If the economy stabilizes and demand improves, chip companies will start to show growth in the fourth quarter, the researcher said.