John Paczkowski

Recent Posts by John Paczkowski

Gartner: Goodbye, Mr. Chips

Ugly news for the semiconductor industry: In 2009, it will suffer back-to-back years of declining revenue for the first time in its history. This according to Gartner, whose last official semiconductor outlook called for 2008 industry revenues to grow 0.2 percent, and for the market to decline 2.2 percent in 2009. Gartner (IT) now expects global semiconductor revenue to fall 16.3 percent in 2009, after a 4.4 percent decline in 2008. Moreover, it believes semiconductor sales in the fourth quarter of 2008 will show a record quarter-on-quarter decline of 24.4 percent, surpassing the 20 percent decline record set in the second quarter of 2001.

Clearly, the econalypse is hitting the semiconductor industry hard. “As bad as it is this quarter, it’s going to get worse next year,” Amy Leong, Gartner’s semiconductor research director, told the Mercury News. “It’s like falling off the cliff… [new orders for chips] are just not coming in.”

That said, Gartner does expect the industry to recover in 2010/2011. “While many executives may try to compare this downturn to the 2001 tech bubble, this downturn is different in many ways,” said Bryan Lewis, research vice president at Gartner. “This downturn is broad-based, not limited to only technology, has a much different growth profile before the downturn, and has far less inventory buildup. Inventory levels this time have been monitored and more tightly controlled throughout the entire food chain, and this will help the market come back more quickly than in 2001.”

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work