Gartner Slashes Global Chip Sales Forecast

Still, the Philadelphia Stock Exchange Semiconductor Sector Index was up 1.2% to 487.4 in midday trading Thursday.

Gartner said that global chip sales in the first quarter of 2007 fell more than 5% sequentially, which it said was worse than the typical seasonal slowdown that comes at the start of the year.

On the positive side, Gartner echoed comments by various companies stating that the glut of chips flooding the market appears to have peaked during the first quarter. That suggests the chip sector could be close to emerging from its latest downturn.

"There are still individual sectors where 'inventory' days continued to rise, but in most sectors inventories have leveled or are already beginning to decline," said Gordon.