Chip market recovering despite oversupply: Gartner

Research group Gartner has raised its forecast for the semiconductor industry, but warned that chipmakers' inventories remain dangerously overstocked.
 
Global revenues appear likely to decline by 17% this year, not the 22.4% previously predicted, Gartner said.
 
“Even though revenue has been showing positive growth, there is not enough of it to overcome the declines we saw at the beginning of 2009,” senior research analyst Gerald Van Hoy said. “We do not see indications of this changing before the end of the year.”
 
The industry has cut its surplus inventory from the “severe excess” of the last four quarters, but stock levels remain in the “caution zone,” according to Gartner's latest semiconductor inventory index.
 
The industry is not likely to resolve the oversupply problem until at least next year.
 
However, the industry has done a far better job of reducing its inventory levels to cope with falling demand than it did during the last major crisis in 2001, Van Hoy said.
 
“In the current situation, we see a very different pattern of response and inventory management,” he said.
 
The industry is likely to return to profitability in 2010, he added.

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