Silicon Valley sees its worst year since 2001
- 14 April, 2009 07:37
There's not much good news for this year's Silicon Valley 150, a tech-sector portfolio created and tracked by the San Jose Mercury News. Most of the companies on the list suffered stomach-churning losses as the economy tanked last year.
The newspaper hasn't yet posted its searchable, sortable database of financial info for 2008 (you can read 2007's much cheerier chart), but the Merc's reporters have outlined the tumult from last year. In short, 2008 was the worst year since 2001:
* Revenue for the Silicon Valley 150 grew only 5 percent.
* Profits dropped a vertigo-inducing 52 percent.
* Internet companies in the SV150 slid 36 percent in market capitalization. Yahoo's loss was the largest: A 50 percent fall from $38 billion to less than $19 billion.
* Hardware makers Hewlett-Packard and Apple grew their revenue, but most computer gear makers struggled. Sun wrote down nearly $1.5 billion and has recently been in talks with IBM over a potential acquisition.
* Hewlett-Packard dominates the local economy in sales revenue. Last year's $118 billion in sales is nearly triple that of second-place Cisco.
* Software makers had mixed results. Nearly half posted net losses, but Oracle's sales jumped 12 percent.
* Chip makers -- the companies that put the silicon in Silicon Valley -- are still a major part of the Valley, employing 200,000 workers. But Intel has fallen behind Cisco in sales to the #3 slot. Some analysts think the company may post its first quarterly loss in 22 years next week. Nvidia, National Semiconductor and Zoran suffered even worse than Intel.
* Biomedical companies are holding out against the recession better than other tech firms.
* Networking -- basically Cisco plus a few much smaller companies -- is also holding out better than most tech subsectors.
What's the takeaway from this? While HP, Oracle and Apple had an OK year, for most of the local tech sector 2008 was worse than 2001. This time, it's not just overhyped Internet startups going bust. The Valley's bread-and-butter employers have been hit by an economic crash they had little to do with. If the recession keeps up, 2009 may be even worse.