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Downturn takes toll on chip industry's revenues
By siliconindia
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Tuesday, 14 April 2009, 01:30 IST
Bangalore: The global downturn has taken a toll on the semiconductor industry, with many of the companies registering a 25 percent dip in sequential revenue in the December quarter. A study also pinpoints that the sector would face additional declines in double digits when March results are released.
The finding based on the online credit analysis of Standard & Poor's Ratings Services also pinpoints that from October 2, 2008, to April 3, 2009, the credit ratings have been lowered for the global chip industry. Around 16 (44 percent) of the 36 ratings in the sector has been lowered and it has negatively revised eight rating outlooks (22 percent), reports Business Week. The 16 companies, for which the ratings were lowered includes large debt issuers such as NXP, Freescale Semiconductor, National Semiconductor (NSM), STMicroelectronics (STM), and Micron Technology (MU).
The negative outlook is seen in the wake of underlying earnings and cash-flow pressures, resulting in weakening credit metrics that could persist over the intermediate term. While March results are expected to be be weaker than December for most companies, preliminary views from several companies suggest that the sector will reach the bottom, and that revenues will trend upward in the June quarter.
