Industry Forecasts Tipping Global Chip Market to Hit $300 billion by 2003

Demand for the wired and wireless devices that deliver network access is eating up more semiconductors, according to a pair of recent forecasts that predict global chip revenue will breeze past $US 300 billion by 2003.

Dataquest Inc and the Semiconductor Industry Association separately said the chip market will grow 37 per cent this year, before cooling off somewhat in 2001.

The industry is not quite halfway through a four-year growth cycle, Jerry Sanders, chairman and chief executive of Advanced Micro Devices Inc, said.

The semiconductor market will gradually decelerate over the next two years before sliding into a short-lived recession in 2003, according to Dataquest, a Silicon Valley-based market research firm.

Dataquest projected that after reaching $US 232 billion this year, expansion of chip sales will slow to 27 per cent in 2001 and 14 per cent in 2002, turning to negative growth in 2003, largely due to manufacturing capacity expansions initiated during the boom.

The SIA calls for 22 per cent growth in 2001, from $US 204.8 billion to $US 249.5 billion. A softer pricing environment will return in 2002, the industry organisation believes, curbing growth to a modest 10 per cent before rebounding in 2003 with 17 per cent growth.

"The semiconductor industry forecast is a consensus figure, which tends to be conservative," Wilfred Corrigan, chairman and chief executive of LSI Logic Corp, said. "My view is that the numbers will be substantially ahead of what's shown in this forecast."

The driver, Corrigan said, is the global build-out of the communications infrastructure. Surging interest in broadband network access among consumers and business users alike is fueling the need for larger-capacity networks and the equipment to support them, added Dwight Decker, chairman and chief executive of Conexant Systems Inc.

Item provided courtesy of Industry Search