Japan's Sumco, the world's second-largest producer of the silicon wafers from which all microchips are made, yesterday said demand suddenly collapsed in September and it now expected to earn 45 per cent less this year than was forecast only seven weeks ago.
“The impact from the financial markets has been uncertainty, falling profits for our customers, cutbacks in capital investment and lower rates of capacity utilisation,” Sumco said.
Evidence that the crisis has caused demand to fall in a sector with few direct links to the financial markets will raise fears of a deep recession in the real economy. It suggests that many electronics manufacturers are preparing for a bad Christmas selling season.
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