Original equipment manufacturers (OEMs) are reporting weak demand for electronic-equipment production in the fourth quarter of 2008. The knock-on effect has already backed up throughout the semiconductor supply chain and the electronics industry is set for a sustained reduction in worldwide production.

Gartner analysts said that weakness in demand is not confined to electronic-equipment production or the largest semiconductor vendors. There is broad evidence to show that weak demand has backed-up throughout the semiconductor supply chain, to foundry chip-manufacturers and chip-packaging, and electronic-equipment outsourcing companies.
The analysts list several announcements that support this finding:
* Chip original design manufacturers (ODMs) manufacturing netbook PCs show market consensus that 2008 demand should be lowered by 20% to 8-million units.
* Chip-manufacturer Linear Technology, which has significant semiconductor distribution revenue, anticipates a sequential decline of up to 20% from third quarter revenue.
* Major audio codec supplier Wolfson Microelectronics anticipates that fourth quarter revenue will fall by 24% from third quarter revenue estimates.
* Foundry TSMC expects fourth quarter shipments to fall by up to 24% from third quarter results, and already has utilisation rates below 75%. However, utilisation rates for chip manufacturers are likely to be around 85% overall.
* Chip packaging company ChipMOS Technologies reported revenue decline of 33% for September 2008.