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IDC, Gartner chime in on bleak chip forecasts

Market researchers IDC and Gartner join the parade of forecasts for depressed chip sales in 2009. There is some light at the end of the tunnel, however.

Brooke Crothers Former CNET contributor
Brooke Crothers writes about mobile computer systems, including laptops, tablets, smartphones: how they define the computing experience and the hardware that makes them tick. He has served as an editor at large at CNET News and a contributing reporter to The New York Times' Bits and Technology sections. His interest in things small began when living in Tokyo in a very small apartment for a very long time.
Brooke Crothers

Market researchers IDC and Gartner made their cases on Wednesday for worsening chip sales in 2009, with both firms predicting that chip revenue will fall by more than 20 percent.

The worldwide semiconductor market will not recover until 2010, primarily due to a very weak fourth quarter, according to IDC. The market researcher expects a decline in global chip sales of 22 percent in 2009, due, among other things, to low chip factory utilization rates and price erosion.

Memory revenue (DRAM and NAND flash) should stabilize by the second half of 2009, but revenue growth will not return until 2010, IDC said. Capital spending is expected to fall by more than 45 percent in 2009.

There is some light at the end of the tunnel, however. "The semiconductor market will begin to stabilize at the end of 2009 and improve in 2010 with a positive growth rate. However, the market will not rise to the levels seen in 2007 and 2008, until beyond 2011," IDC said.

Gartner, on the other hand, doesn't see a recovery to 2008 levels until 2013 and forecasts an even steeper revenue decline, of 24 percent, to $194.5 billion in 2009. This revises downward Gartner's December forecast of a 16 percent drop in the 2009 chip market.