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Sharky Extreme : News From Inside The Industry October 28, 2009

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    By Andy Patrizio :  October 28, 2009

    Chip companies are rapidly closing the gap from the precipitous plunge they took one year ago after the economy collapsed under the weight of financial scandals and the housing market bubble finally popping.

    Chip vendors should see an increase in year-over-year sales figures in the fourth quarter, the first time in 2009 for a year-on-year gain, according to a report from market researcher iSuppli on Tuesday. Of course, that figure is tempered by the fact that Q4 '08 was a huge drop from the first three quarters of that year.

    Revenue from chip sales is expected to rise by 10.6 percent in the fourth quarter compared to the same period in 2008. This would mark the first time this year that revenue has risen compared to the same period a year earlier, according to Dale Ford, senior vice president, market intelligence, for iSuppli.

    "The seeds of the current recovery were sown in the second quarter," said Ford in a statement. "During that period, manufacturers began to report positive book-to-bill ratios, indicating future revenue growth. This was followed by another sequential increase in revenue in the third quarter."

    When the economy flat lined last year, vendors and OEMs alike stopped buying new inventory and allowed existing supplies to bleed out until they were almost all gone, making Q1 particularly painful for all players. Then customers slowly began to refill inventories in Q2. In Q3, purchasing picked up and many of the sales didn't go into inventory but straight into products.

    Every PC OEM had a major launch behind the release of Windows 7 as they counted on the good reviews for the product and the belief in pent-up demand to drive sales. This resulted in chip sales accelerating every month. Read the rest at InternetNews.com.

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