No one can predict the recovery

Though everyone can put a number on how much the semiconductor industry is down, even Intel Corp, www.intel.com the world’s largest chipmaker, and cannot predict exactly when the industry will revive.
Last week the Semiconductor Industry Association www.sia-online.org reported that worldwide sales of semiconductors were $14.5 billion in February, a decline of 30.4% compared to February 2008 sales of $20.3 billion. And in a month on month comparison, sales declined 7.6% from January when sales were at $15.3 billion, SIA said.
“Demand for semiconductors is likely to continue well below 2008 levels for the next few quarters, with a gradual recovery to follow as the global economy recovers,” SIA president George Scalise said in the report.
This week the WSTS (World Semiconductor Trade Statistics) organization www.wsts.org reported that the global market for semiconductors stood at $13.47 billion in February 2009, down 27.2% from the $18.5 billion reported in February of 2008 in a somewhat higher number comparison. The WSTS numbers are based on actual results, and may hint at a slight improvement in the industry.
This week when asked to predict semiconductor recovery, Intel’s Chairman Craig Barrett responded that stimulus packages currently being rolled out by governments around the world would start seeing responses in six to 18 months, according to a Reuters’ report.
“So you pick your time that you want to recovery to occur in that six to 18-month period, and your guess is as good as anyone’s,” Barrett said while visiting Beijing.

The Big Guys: Intel, Freescale and everyone else

It has been a busy couple of weeks at my desk collecting things in the electronics industry. Let’s review what everyone is talking about.

First, let’s get the negatives out of the way, starting with the big companies. Intel announced one of its worst Q4s ever on January 15. The very next week Intel announced that with would cut 6000 jobs by closing three assembly test facilities, halting production at its 200-mm fab in Hillsboro, OR and at its wafer production operation in Santa Clara. But wait, that’s not all. This same company that produces 76% of worldwide market for microprocessors is still in court battles with Advanced Micro Devices. AMD submitted a first complaint to the Commission in October of 2000 alleging that that “certain marketing arrangements in respect of ACER, Dell, Hewlett Packard, IBM and NEC, and certain of Intel’s pricing practices infringed Article 82 EC.” The Commission preliminarily stated that Intel had implemented an anti-competitive strategy to exclude AMD from or limit its access to the market for 86 microprocessors.

More bad news for those who listened in to Freescale’s Q4 results. Sales are down 33% as compared to Q3 results in 2008 and down 39% as compared to the same period last year. Sales were $940 million said Alan Campbell, in a Scottish brogue. Rich Beyer, chairman and CEO said, “We remain focused on further reducing our break-even point while ensuring we execute on our strategic growth initiatives and leverage our market leadership positions.” Did I mention that they’re still unloading the handsets from the Motorola connections, but now they’re willing to sell it piecemeal? More to come.