PC chips production will be low next year due to bad global economic health, say IHS and IDC

Semi-conductor chip market is at a three-year low in sales and its production is expected to decline in the coming weeks, probably years due to the decrease in PC demand all over the world. Research firm IHS stated Friday that the production is expected to decrease 0.1 percent this year due to the aggravating global economic conditions.

The company stated that the sales have received a major blow due to the Euro zone crisis and the slow growth in the US market. HIS forecasted a little less than 3 percent increase in sales of semiconductor chips but the low sales in the second and third fiscal quarters have shown that the sales are likely to decline in the next year.

“The disappointing results in the second quarter and weak third-quarter expectations driven by poor economic conditions are expected to cause the semiconductor market to retreat this year,” IHS analyst Dale Ford said in a statement.

Another research firm IDC stated in a report that the conditions are anticipated to aggravate in the next few years due to the global crisis and the lack of demand in PC-based chips.

The companies also stated that the sales of wireless connection chips will not be able to narrow down the deficit in the anticipated and actual sales this fiscal term.

However, IHS is still optimistic about sales in fiscal 2013. They are of the opinion that a 9 percent increase in sales next year can be slated if the economic conditions remain stagnant or start to get back on their feet. However, the biggest hurdles in such claims might a worsened Euro crisis, a U.S. federal tax and budget fiscal cliff, turmoil in the Middle East and a slower growth in China.

The share prices of major chip manufacturers received the news badly. Intel’s stock was down in decimals, while Texas Instruments and Taiwan Semiconductor Manufacturing also had a decrement in their share prices.

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Posted by Usman Khalid on Aug 25 2012. Filed under Business, Sci-Tech. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.