Worldwide chip sales to fall 17% in 2001, says Dataquest

Worldwide chip sales to fall 17% in 2001, says Dataquest
By Semiconductor Business News
May 10, 2001 (4:21 a.m. EST)
URL: http://www.eetimes.com/story/OEG20010508S0059

SAN JOSE -- Dataquest Inc. here today slashed its forecast for the worldwide semiconductor industry for the fourth time in recent months, projecting that the IC business will decline 17% over last year. But the worldwide chip market is poised for a modest recovery in 2002, according to a new forecast from Dataquest.

Citing the downturn in the industry, Dataquest projected that the worldwide chip business will hit $188 billion in terms of total sales for 2001, a 17% decline from 2000.

The forecast represents the latest revision for the San Jose-based research house. Back in October of 2000, Dataquest originally projected that the worldwide semiconductor market would hit $295.2 billion in terms of total revenues for 2001, a 27.5% jump over 2000.

But Dataquest has steadily lowered its forecast since the beginning of this year, following what has been a steep--and surprising--downturn in the chip and end-user equipment businesses.

"In 2001, all [chip] product types are seeing a serious decline in revenue, with the DRAM- and flash-heavy memory category dropping 26%," said Tom Starnes, who tracks the IC market for Dataquest.

In 2002, however, the chip market is expected to rebound--albeit at a modest rate. In total, the worldwide chip industry is projected to hit $213.3 billion in 2002, a 13.2% jump over 2001, according to Dataquest.

The IC market is expected to jump 24.2% in 2003 and 30.8% in 2004, but will drop by 2.8% in 2005, they said.

"Semiconductor markets are expected to expand from 2002 to 2004, but near the end of 2004 or into 2005, the traditional imbalance of too much product is expected to appear again, initiating the next phase of the semiconductor cycle," Starns said.

"In 2002, memory is expected to grow at roughly 26%, but this will not return the revenue to its $68 billion high of last year," he said.

The ASIC- and system-on-a-chip segments will experience the highest overall compound annual growth rate in th e semiconductor market through 2005, topping 10%, according to Dataquest.

"Logic is consuming some of the other categories as more and more semiconductors move to market-specific or customer-unique high-density digital and analog chips that continue to integrate more processor cores and other standardized intellectual-property circuits," Starnes said.