Japan quake to hit supply chain for rest of 2011

Semiconductor sales slow following production delays

The impact of the Japan earthquake and tsunami on the semiconductor industry will be felt for the remainder of the year, according to a warning from Gartner.

The analyst has cut its worldwide revenue growth forecast to $299bn (£184bn), representing growth of 5.1 per cent compared to previous estimates of 6.2 per cent, due to an unstable supply chain caused by the events in the Far East.

In the final two weeks of March vendors scuttled around trying to secure supply "in the face of uncertain and potential shortfalls", resulting in order duplication which spilled into the second quarter, said principal research analyst Peter Middleton.

"Although the impact is less than feared, we are anticipating some residual effects in the third quarter of 2011 as friction in the supply chain may impact some production and some surprises may occur," he said.

"However, once third-quarter trends are established and supply chain participants are satisfied that all issues are understood and production is normalised, we expect an effort to draw down inventory, which will weaken the semiconductor market in late 2011 and early 2012."

Application-specific standard product revenue is expected to hit $79.7bn this year, the application-specific integrated circuit space - galvanised by investments from Apple and its mobile devices - but highest growth will come from non-optical sensors used in smartphones, tablets and video game hardware. ®