SIA predicts 19.8 percent chip market growth in '03

Chip market up 1.3% in '02 says SIA, predicts 20% growth in '03

Chip market up 1.3% in '02 says SIA, predicts 20% growth in '03
By Peter Clarke, Semiconductor Business News
February 3, 2003 (10:39 a.m. EST)
URL: http://www.eetimes.com/story/OEG20030203S0038

SAN JOSE, Calif. --- Global semiconductor sales were $12.5 billion in December 2002, bringing total revenue for the year to $140.7 billion, a 1.3% increase from the 2001 level of $138.9 billion, according to the Semiconductor Industry Association (SIA). The organization predicted a 19.8% growth year in 2003 but also observed that geographically, a 2002 boom in the Asia Pacific region only just compensated for continuing declines in the Americas, Japan and Europe.

According to the SIA's Global Sales Report (GSR) revenue rose during the year's final quarter by 1.9% sequentially to $37.6 billion, up from $36.9 billion, following increases of 5.6%, 5.8% and 8.2% in the first three quarters of 2002, and was up 23% over the corresponding quarter of 2001.

The numbers are three-month moving averages of sales activity intended to smooth the peaks and troughs that might otherwise be seen due to companies' monthly financial calendars. The GSR is tabulated by the World Semiconductor Trade Statistics (WSTS) organization.

"The recovery that began in the final quarter of 2001 continued throughout 2002, producing 1.3% growth in this turnaround year," stated George Scalise, president of the SIA, in a statement.

"This is remarkable performance, in the face of lackluster demand in the information technology market. We expect further improvement across broad product sectors, positioning the industry for 19.8% growth in 2003, increasing revenues to $169.3 billion."

In 2002 the wireless sector recorded the most vigorous growth with unit sales of handsets up by double-digits in the fourth quarter, producing growth of 13.2% in flash and 6.8% in DSPs, the SIA said. New subscribers continue to set records in Asia, particularly in China, which is adding some 5 million new users each month.

At the same time the PCs continue to be the single largest end market for semiconductors, accounting for 30% of total chip consumption. Although chips for the PC market experienced slow demand in 2002 the SIA said there was evidence that the corporate buyer is returning to the market. During the December quarter due to increased PC demand, microprocessor and DRAM sales were up 10.1% and 7.6% respectively.

"We expect the momentum built throughout 2002 in both cell phones and PCs to increase in 2003," stated Scalise. "As a result, for the first time since 2000, we believe IT spending on hardware will register an increase."

The consumer sector, including DVD's and digital cameras and wireless LAN products was another growth driver for semiconductors.

Geographically it was boom growth in Asia Pacific region that almost exactly compensated for declining sales elsewhere. The SIA ascribes this geographical dichotomy to the migration of electronic equipment manufacture to facilities in the Asia Pacific region.

For the year 2002, chip sales declined 13% in the Americas, 8% in Japan and 8% in Europe from 2001 levels.