Chip Sales Constrained: Second-Half View

The ECRI U.S. weekly leading economic indicators are pointing to a weakening of the U.S. economy in mid-2010, resulting in a slowdown in semiconductor revenues.

Personal consumption will remain sluggish in the second half of 2010 because of an ongoing jobless recovery, further deterioration in credit and continued weakness in home prices.

The ECRI U.S. weekly leading indicator forecasts economic conditions approximately six months in the future.

The U.S. is the largest consumer electronics market. In 2009, 20% of the global consumer electronics revenue came from purchases in the U.S./Canada, followed by Western Europe, with 19%. Weak consumer demand in 2010 will translate to weak chip sales.

Semiconductor revenue will grow 11.2% in 2010 to $245 billion, up from $220 billion in 2009.