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Equipment markets to start recovering towards end of year

While the PC market reaches the bottom of its growth pattern, and excess inventories have been reduced to provide a stabilising influence, research predicts that the equipment markets are likely to begin their recovery no sooner than Q4 of this year.

The study, carried out by market research company Gartner, cautions that uncertainty still lingers as to the effectiveness of government stimulus packages and macroeconomic recovery, citing the latest macroeconomic forecasts and industry supply and inventory patterns. Data indicates that almost all sectors of the electronic equipment market are still declining.

Klaus Rinnen and Jim Tully, Gartner analysts, wrote in the company’s Semiconductor DQ Monday Report: "Markets must hit bottom before we see a rebound to positive growth.

"The bottoming of PC-related production is breathing the first signs of hope into the electronics supply chain. Still, the majority of the industry will not bottom until the third quarter of 2009.”

According to the analysts, while the first signs of growth will be the seasonal buying patterns in the PC market during Q4, overall sustainable growth could be pushed well into 2011, with sectors outside the PC market showing slow growth in 2010, the first sector of prominence likely to be mobile phones.

"While the emerging supply chain will be leaner and stronger, it will look different,” Tully and Rinnen said. “Awareness of risk both up and down the supply chain is a must for industry players to maximize their opportunities."

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