Electronics sector poised for turnaround in Q4

A turnaround for the electronic equipment markets is forecast for the fourth quarter of 2009, according to analyst group Gartner. The industry should enter into a period of sustained recovery in the Q2 of 2010 with a forecast acceleration in sales in 2011, the analysts claim.

While nearly all sectors of the electronic equipment market are experiencing a decline, Gartner's semiconductor manufacturing group, managing VP Klaus Rinnen, said that the markets will hit bottom before we see  a rebound to positive growth. "The wider process of rebounding will occur over a period of approximately two years."

Rinnen said the majority of electronics segments will not reach bottom until the second half of 2009, and until then, uncertainty will remain high and visibility low.

PCs and mobile phones, are flagged to be among the lead segments to bottom out and start the charge for the recovery, with mobiles  edging PCs by about one quarter.

Yet, Gartner warns that although improvement in electronics inventories, in combination with government stimulus, will likely put a halt to the current slide in the market, timing is key to getting the recovery off the ground.

“If economic growth and government stimulus are slow to materialize, the industry could see a demand and production lift followed by a languishing demand period and even a risk of overproduction in mid-2009,” Gartner warns.  

If this occurs it would derail the turnaround and also force a second and lower bottom for the PC market.

Industry players are urged to be aware of the risk, both up and down the supply chain. “Careful attention must be given to the expected recovery pattern of each sector, and a response must be planned, as those vendors with the most credible response to these patterns will be the ones that emerge from the downturn as winners,” the analysts said.

 

Suggested Articles

Wireless operators can provide 5G services with spectrum bands both above and below 6 GHz—but that doesn't mean that all countries will let them.

Here are the stories we’re tracking today.

The 5G Mobile Network Architecture research project will implement two 5G use cases in real-world test beds.