Chip industry to begin recovery in Q2 - iSuppli

The global semiconductor industry is expected to take its first steps toward recovery this quarter, iSuppli said.

Semiconductor use is poised to rise for the first time in a year, the research firm said, with utilization of semiconductor capacity growing to 60% this quarter from 49% in Q1.

“The expected rise in utilization rates in the second quarter signals the semiconductor industry has entered into the recovery phase,” said Len Jelinek, iSuppli's chief semiconductor analyst.

In part this is because suppliers have been cutting fab capacity to match falling demand, he said.

Total semiconductor manufacturing capacity fell to 732 million square inches of silicon in the first quarter, down from 756 million square inches in Q4 2008, the researchers said.

Looking ahead, iSuppli predicts that utilization will rise to 75% in Q3, but decline slightly in Q4. Utilization is expected to remain flat in Q1 2010, but resume a sequential ascent during the rest of the year, reaching pre-downturn levels by the end of the second quarter.

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