Lowered Production Equipment of Semiconductor

    VLSIresearch reported that it had lowered its forecast for 2016 Semiconductor Production Equipment sales to $44.0B, a drop of -9.9% from the $48.8B it expects the industry to achieve in 2015. It cited the approach of the Christmas Blackhole for drying up order activity in the current environment. VLSI calls this time of year the Christmas Blackhole because visibility goes dark until the holiday season is over. There is always a seasonal inventory buildup in anticipation of holiday sales. In great years, sales are cleared by New Year’s Day, leading to inventory restocking. In good years, it still clears by the lunar New Year.

    VLSI is not so optimistic this year in part because wafer fabs have been pumping out silicon at an unprecedented rate, while electronics demand has been weak. It sees electronics finishing out 2015 with a meager 0.8% growth, which combined with high levels of chip production, is putting heaving pricing pressure on semiconductor prices.

    •  Industry remains stuck in downturn territory

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