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Semiconductor Sales Slipped 3 Percent in Second Quarter

Global semiconductor revenue in the second quarter fell 3 percent compared to the third quarter of 2011 as sales dropped to $75.2 billion, researcher IHS reported.

Poor economic conditions, continuing high unemployment in the U.S. and the financial crisis in Europe resulted in widespread revenue declines for semiconductor suppliers, especially those based in Japan and Europe, the researcher said.

Second-quarter revenue increased by less than 3 percent compared to the usually sluggish first quarter. If the semiconductor industry was to have stronger growth in 2012 than 2011, second quarter sequential growth would be expected to amount to at least 4 percent or more, IHS reported.

“Second-quarter growth for the global semiconductor industry was highly disappointing,” said Dale Ford, senior director of electronics and semiconductor research at IHS.

He added that about two thirds of the world’s semiconductor suppliers posted revenue declines in the second quarter compared to the same period in 2011. “This weak performance bodes ill for the semiconductor industry’s growth prospects for the entire year,” said Ford.

Global semiconductor revenue expanded by a marginal 1.4 percent in 2011.

Among the top 10 semiconductor suppliers, six companies saw their revenues decline compared to the second quarter of 2011. Four of those companies suffered double-digit revenue declines.

European-based firms took the brunt of the downturn due in large part to the economic crisis in the region. Among all semiconductor suppliers in Europe, combined revenue in the second quarter fell by 8.3 percent compared to a year earlier. European semiconductor suppliers STMicroelectronics and Infineon Technologies saw double-digit year-over-year revenue declines of 16.4 percent and 12.9 percent, respectively, according to IHS.

Collective revenue for Japanese semiconductor suppliers retreated by 7.5 percent in the second quarter compared to the first quarter. Half of the Japanese chip suppliers experienced decreases in revenue. However, steep revenue declines by Toshiba Corp., Renesas Electronics Corp., Fujitsu Semiconductor Ltd. and Mitsubishi magnified the overall decreases, the researcher reported.