IHS (IHS) Cuts 2011 Semiconductor Revenue Growth Outlook to 2.9%
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IHS (NYSE: HIS) has cut its semiconductor revenue growth outlook for 2011 amid rising economic woes and weak consumer confidence, which the firm believes is weighing on electronic demand.
The IHS iSuppli Application Market Forecast Tool was forecasting 4.6 percent revenue growth back in August, but now is only estimating revenue growth of 2.9 percent to $313.3 billion. This reduction is largely due to the fact that its GDP growth outlook fell from 3.7 percent in March to 3 percent more recently. During the same time period, the outlook for global GDP growth has also fallen from 2.4 percent to 1.4 percent.
“Mounting economic weakness is taking its toll on the worldwide electronics and semiconductor industries just as these markets are entering the critical pre-holiday sales season,” said Dale Ford, vice president, electronics supply chain and semiconductors for IHS.
A quick Japanese recovery will help boost demand and shipments for the second half of 2011. IHS notes if the economy does fall into a recession this year, the semiconductor market will experience flat growth for the year. One thing that does scare IHS is if the negative response is amplified, it may lead to extremely high levels of uncertainty and volatility in a supply chain which may not stabilize until 2013.
The main driver in 2011 for semiconductor growth is in the wireless market as it is expected to increase by 16.7 percent, while semiconductor revenue in wired communications, consumer electronics and automotive electronics are expected to decline.
The IHS iSuppli Application Market Forecast Tool was forecasting 4.6 percent revenue growth back in August, but now is only estimating revenue growth of 2.9 percent to $313.3 billion. This reduction is largely due to the fact that its GDP growth outlook fell from 3.7 percent in March to 3 percent more recently. During the same time period, the outlook for global GDP growth has also fallen from 2.4 percent to 1.4 percent.
“Mounting economic weakness is taking its toll on the worldwide electronics and semiconductor industries just as these markets are entering the critical pre-holiday sales season,” said Dale Ford, vice president, electronics supply chain and semiconductors for IHS.
A quick Japanese recovery will help boost demand and shipments for the second half of 2011. IHS notes if the economy does fall into a recession this year, the semiconductor market will experience flat growth for the year. One thing that does scare IHS is if the negative response is amplified, it may lead to extremely high levels of uncertainty and volatility in a supply chain which may not stabilize until 2013.
The main driver in 2011 for semiconductor growth is in the wireless market as it is expected to increase by 16.7 percent, while semiconductor revenue in wired communications, consumer electronics and automotive electronics are expected to decline.
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