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2 April 2009


Recession drove 15% drop in compound semiconductor revenues in Q4/08

In fourth-quarter 2008, compound semiconductor industry revenues dropped sequentially by an average of 15%, with individual companies seeing their revenues drop 10-30%, according to the Strategy Analytics GaAs and Compound Semiconductor Technologies (GaAs) service’s regular analysis covering microelectronics, optoelectronics and materials/equipment markets.

Q4/2008 saw an abrupt drop-off in sales as demand from end markets ground to a halt. A financial performance snapshot of companies offering optoelectronic products, materials and equipment shows a similar story to the RF market, with sequential revenues declining.

“Profitability was also hit,” says the market research firm’s Asif Anwar. “In some cases, exceptional charges related to merger and acquisition activity over the past 12-18 months compounded the ability of companies to generate positive net income,” he adds.

“While the first quarter in 2009 will see further sequential reductions in revenue, Strategy Analytics believes that pockets of recovery will emerge in the second quarter, and current indicators suggest that the industry will start to see growth from the second half of 2009 moving into 2010,” Anwar concludes.

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