According to Gartner, the worldwide semiconductor industry has been hit by the softening consumer and business demand as it recorded an estimated revenue decline of US$12 billion for 2008, compared to last year.

The effects of constrained budgets are being felt by the semiconductor companies. Moreover, there has been a tremendous slowdown in demand of products like cars, consumer electronics and Pc's that has led to the lower revenues. Components for sectors ranging from the technology industry to the medical industry are made by the semiconductor industry.

According to Andrew Norwood, research vice president at Gartner, "The automotive industry meltdown has hit the semiconductor industry particularly hard. There is also less inclination for consumers to spend money on in-car navigation and entertainment systems, for which semiconductor companies make components."

He further added, "PC makers are also slowing down component orders and are instead trying to clear out existing inventory. The inventory purge by PC makers and other companies is leaving semiconductor factories underutilised, which creates a cost burden that semiconductor companies have to bear."

If adhered to Gartner; for the year 2008; the total estimated revenue for the semiconductor industry is 261.9(£160) billion, a 4.4 percent decline from 2007.

Gartner says, "Many of the top semiconductor manufacturers saw revenue either decline or record flat growth this year. Except for Intel, which saw flat revenue growth, Samsung, Toshiba, Texas Instruments and STMicroelectronics all saw year-over-year revenue drops in 2008."