The global semiconductor industry will probably slow down in 1989 since it cannot sustain the growth rate it enjoyed earlier this year, says the chairman of Texas Instruments Inc.
The worldwide industry had a growth rate of over 30 percent in the first half of 1988, which it will not be able to maintain, Jerry Junkins told analysts."I think that's an unsustainable rate, and we are headed for some slowdown," Junkins said.
His comments came as the industry's main trade group reported that the book-to-bill ratio, or ratio of new orders to shipments, fell to 0.92 over the last three months due to lower inventories and slower markets.
The industry had posted a September book-to-bill ratio of 0.97, which means it received an average of $97 in new orders for every $100 worth of equipment shipped for the three months ended that month, the Semiconductor Industry Association said Wednesday.
But Junkins said any future downturn will be nothing like what the semiconductor industry experienced in 1985, when the market for computer chips suffered from oversupply. Foreign companies contributed to the glut, he said, by dumping chips in the U.S. market.
Texas Instruments is now in a much better position to withstand a downturn than it was in the mid-1980s, Junkins said.
Dallas-based TI, which had $5.6 billion in sales last year, has held employment almost steady in its semiconductor division for the last two years, Junkins said. The company also makes more complex products now, he added.