Global Chip Market To Shrink For Second Straight Year

The semiconductor industry already faced the prospect of things getting worse before they got better, but now technology research firm Gartner has revised last month's moderately gloomy outlook for chip sales next year toward some seriously dismal prognostication.

Gartner in November had already pegged the global market for chips in computers and electronic devices as shrinking 2.2 percent year-on-year in 2009. But the firm revised that number downward Tuesday, issuing a report that projects just $219.2 billion in total sales next year, a drop of 16.3 percent.

What's more, the revised number also accounts for last week's Gartner downgrade of chip sales for this year--from November's prediction of 0.2 percent revenue growth over 2007 to the 4.4 percent shrinkage in 2008 that the firm is now projecting.

Gartner now puts this year's total global chip revenue at $261.9 billion. The revised figure, coupled with the firm's projection of further declining sales in 2009, means the semiconductor industry could face two straight years of revenue decline for the first time in its history, the Gartner report said.