Chipmakers scrambling to cope as market could shrink by 30%
European chipmaker STMicroelectronics released its fourth quarter numbers today, and, of course, they were very grim. Unfortunately, at this point, even very grim Q4 numbers aren't news, nor are the 4,500 jobs that the company announced it would cut. But what does still make headlines are credible predictions of a massive contraction in the global semiconductor market, and that's exactly what STMicro's CEO delivered.
As reported by Reuters and other outlets, CEO Carlo Bozotti told reporters at a Paris conference that the global market for semiconductors could fall between 25 and 30 percent this year. He also stressed that the current slump will be "very long," and he predicted that most semi fabs would be running at 50 percent capacity or lower this year. STMicro COO Alain Dutheil told Reuters, "What is new is that originally the idea was to cut capacity in high-cost areas like the U.S. and transfer capacity to Asia. Today we are cutting the capacity in the U.S. but we are not transferring this capacity to Asia."
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