Dataquest sees worst dip ever for chip market

Dataquest sees worst dip ever for chip market
LAS VEGAS — Painting the gloomiest picture yet of the current semiconductor industry downturn, Gartner Dataquest analyst Bryan Lewis said that revenues will drop by 25 percent this year versus 2000, marking the steepest year-to-year decline ever in the chip industry's history.

Speaking at a briefing here Sunday (June 17) prior to the start of the 38th Design Automation Conference, Lewis, director of ASIC and system-level integration research at Gartner Dataquest (San Jose, Calif.), also pushed out the timing of the semiconductor industry's recovery to mid-2002. However, Lewis said these developments would not heavily impact the number of design starts, which provided some comfort to the EDA company executives that made up his audience.

In contrast Gartner Dataquest chief analyst Jim Tully said that the market for licensable semiconductor intellectual property grew 40 percent in 2000 over 1999, and was expected it to achieve the same level of growth in 2001. But it was Lewis' comments on the troubled semiconductor industry that caught the audience's attention.

"The downturn has changed in the last month," Lewis said. "There have been a number of announcements in the last month, of layoffs and revenue warnings. Given the new information there's now a good chance that things will get worse. 2001 could be down 25 percent."