Chip Sales Expected to Falter This Year

The bad news about PC sales, particularly at Dell (NASDAQ: DELL) and Hewlett-Packard (NYSE: HPQ) was bound to be bad news for chip markets Intel (NASDAQ: INTC) and AMD (NYSE: AMD). The extent of the problem was driven home by new forecasts of semiconductor sales for 2012 made by IHS (NYSE: IHS). The firm reported in its new. The research operation writes that date from its IHS iSuppli Application Market Forecast Tool show:

Global semiconductor revenue now is expected to decline slightly for the year, contracting by 0.1 percent.

And,

The previous IHS forecast called for marginal growth of less than 3 percent. This will mark the first annual decline for the global semiconductor industry since 2009.

Part of the cause of this is the rise of smartphones, which have lowered demand for PCs as they begin to take on more PC-like characteristics. The best proof of this is the sharp rise in sales of smartphones from Samsung, and the Apple (NASDAQ: AAPL) iPhone.

As for next year:

At this point, IHS is still forecasting a strong growth rebound of more than 9 percent in 2013, based on expectations of improving economic conditions. However, multiple high-impact events still present the risk of a strong downturn in the economy in 2013, which would also pull down the electronics and semiconductor industries. These potential events range from the Eurozone crisis, to significantly slower growth in China, to the potential federal tax and budget fiscal cliff in the United States, to turmoil in the Middle East.

Douglas A. McIntyre