China’s semiconductor market is expected to shrink by 5.8 per cent in 2009, the first significant setback for the industry, said a market report released on Friday.
Total sales of chips is forecast to drop to $72 billion in 2009 from $76.5 billion a year before, US-based market research firm iSuppli said in its latest report.
The project sales fall would add to the woes of the global semiconductor market, which is expected to drop 9.4 percent this year, iSuppli said.
“Such a downturn is remarkable for a region long regarded as a vigorous and reliable growth driver for the global semiconductor market,” Kevin Wang, senior manager of China research at iSuppli, said in a statement.
“Even in 2001, when global semiconductor revenue plunged by 28.6 per cent, the China market managed to surge by 24.4 per cent. With global semiconductor revenue expected to decline in 2009, and with consumer confidence at risk of falling further, the outlook of China’s semiconductor industry could be even dimmer than iSuppli forecast.”
In 2008, China’s semiconductor market shrank by 0.1 per cent, which iSuppli billed as “a flat year”.
The market is projected to resume growth in 2010, with revenue rebounding by an estimated 9 per cent, followed by an 11 per cent increase in 2011, iSuppli said.