Global chip makers expect sales drop next year

Global sales of semiconductors are likely to fall 2.2 per cent next year due to weak demand for electronics worldwide, industry group World Semiconductor Trade Statistics said yesterday, reversing its May forecast of 5.8 per cent growth.

Chip giants Intel Corp. and Samsung Electronics Co. Ltd are steeling themselves for weak computer sales in the holiday season and beyond as the economic crisis hits consumer sentiment.

The chip market will shrink to €203 billion next year, down from an expected €207 billion this year, said WSTS, whose 66-member chip makers make up roughly 80 per cent of the global chip market.

Semiconductor companies worldwide are cutting output and capital spending. Taiwan Semiconductor Manufacturing Co., the world's largest contract chipmaker, said yesterday that it had frozen hiring after posting its biggest decline in monthly sales. Sales of microchips are expected to fall 9.8 per cent in the Americas next year, trailed by a 3.8 per cent decline in Japan and a 3.6 per cent fall in Europe, the WSTS said.

Sales in the Asia-Pacific region will slow to 1.1 per cent growth next year, down from an expected 7.6 per cent growth this year.

The industry group also cut its outlook for this year and 2010. Chip makers now expect sales to grow an annual 2.5 per cent this year, down from a previous outlook of 4.7 per cent, as sales stall before the year-end holidays and inventory piles up, lowering prices.