Market figures show some signs of an upturn

Second quarter statistics show that the freefall is finished. But what happens next is like watching a basketball falling from up high: you don’t know whether it’s going to take one sharp upward bounce or whether it will go through a few small ups and downs.
The market slowdown was particularly steep in the semiconductor world, where sales plummeted so far that it took four quarters for chipmakers to clean out their inventory, according to analysts at iSuppli.

The related revenue decline was a depressing 18 per cent in the first quarter. The problems, which rippled out to the EMS marketplace, were tied to a price decline of 8, 9 and 5 percent over the past three quarters, according to iSuppli.

The freefall has stopped, however briefly. Global semiconductor revenue will increase by a vigorous 10.4 percent in the third quarter and by 4.9 percent in the fourth, iSuppli predicts. But the market research firm predicts that both chip demand and chip pricing will take a downward turn in the 4th quarter.
Statistics from IPC loosely follow the same trajectory. Rigid board shipments and bookings fell around 30 per cent in the first half of 2009. But shipments were sharply higher in June than in May, and the book-to-bill ratio also climbed.

Like many stats for other industries, the latest figures show signs that the worst is over. Unfortunately, the numbers don’t show signs of a strong, sustained upturn. Most companies will be happy to take any bounce they can get. Current signs show that it’s time to start adding optimism to some planning. But the signs also say that it too soon to stop using caution in those plans.

Executives looking for assistance in market forecasts should attend the IPC Electronics Industry Executive Summit, taking place October 21-22, 2009, in Phoenix. The agenda is available and the sessions are an excellent source of information for making plans for 2010 and beyond.

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