From Paris to Tokyo, from the biggest broad-line suppliers to the most modest boutiques, from high-fliers serving hot markets to low-profile players plodding away in slow-growth segments-virtually no semiconductor company was immune from the miserable conditions in the global semiconductor industry during the first quarter, according to iSuppli Corp.

Worldwide semiconductor revenue in the first quarter declined to $44.3 billion, down 18.8 percent from $54.5 billion in the fourth quarter, and a decline of 33.8 percent from $66.8 billion in the first quarter of 2008. Revenue was down 36.2 percent from the start of the present sharp downturn in the third quarter of 2008.

Even prior to the downturn, the semiconductor industry experienced an extended period of lethargy. Quarterly semiconductor revenue peaked six quarters ago in the third quarter of 2007.

“Of the 130+ semiconductor suppliers tracked by iSuppli on a quarterly basis, only six managed to expand their revenue in the first quarter compared to the fourth quarter of 2008,” said Dale Ford, senior vice president, market intelligence, for iSuppli. “Even among these six suppliers, four increased their revenue by only 1 to 3 percent.”

Meanwhile, every major region of the world suffered double-digit percentage declines in semiconductor revenue in the first quarter compared to the fourth.

“Although the first quarter is typically weak for the global semiconductor industry, the sharp declines in semiconductor during that period and in the fourth quarter of 2008 reflect the impact of the global economic downturn on the worldwide chip business,” Ford observed.
 
Regional variations
Despite the negative picture, some regions were not as badly impacted as others.

Companies headquartered in the Americas fared the best during the downturn, with a combined revenue decline in U.S. dollars of 30.8 percent since the third quarter of 2008. European-headquartered companies suffered the worst decline, with their combined revenues falling by 44.5 percent during the same period. Japanese suppliers fared nearly as badly as their European counterparts, suffering a contraction of 43.5 percent.

However, the picture is very different if company revenues are maintained in the local currency and not converted to U.S. dollars. Changes in currency exchange rates have a notable impact on revenue growth when converted to a common dollar basis. European supplier revenues fell by only 36.1 percent since the third quarter of 2008 if their revenues are measured in euros. On the other hand, Japanese company revenues fell by nearly 51 percent during the same time if their revenues are measured in yen.

Korean and Taiwanese suppliers saw steep revenue declines between the third and fourth quarters of 2008 followed by much more moderate declines between the fourth and first quarters. In contrast, Japanese companies suffered the biggest hit on revenues in the first quarter of 2009 when their combined revenues fell by nearly 31 percent compared to the fourth quarter of 2008.
 
The bright side
On a positive note, iSuppli’s latest semiconductor forecast predicts that the first quarter of 2009 will represent the bottom of the semiconductor market decline and that revenues in the fourth quarter of 2009 will exceed those in the fourth quarter of 2008.

On a sequential basis, revenue will rise by 7.1 percent in the second quarter, by 10.4 percent in the third quarter and by 4.9 percent in the fourth quarter.

Looking back at the first quarter, there was one notable performance among all the suppliers-that of Taiwan’s MediaTek Inc. The company in the first quarter expanded its revenue by 10 percent on both a sequential and year-over-year basis.

The attached file presents quarterly semiconductor revenue changes by region, semiconductor suppliers that managed positive quarterly revenue growth in the first quarter, and historical and forecast quarterly semiconductor revenues.
 
www.isuppli.com