Modest chip downturn won't hit until '03, says Dataquest forecast
Semiconductor Business News
(10/09/00, 11:19:33 AM EDT)
SAN JOSE -- Despite some concerns about the chip industry over investing in production capacity, Dataquest Inc. today predicted that semiconductor suppliers will have two more years of solid growth before a modest downturn hits in 2003.
The market research firm here released a new forecast showing worldwide chip sales increasing 37% to $231.6 billion in 2000, followed by growth of 27.5% to $295.2 billion in 2001 and 13.9% to $336.2 billion in 2002. But in 2003 chip sales will drop 4.5% to $320.9 billion, said Dataquest.
"It has taken the industry five years to return to the strong revenue growth achieved in 1995, when the industry grew almost 38%," said Mary Olsson, a principal analyst in Dataquest's semiconductor group in San Jose. "Yet, despite the growth resemblance between 1995 and 2000, we do not believe 2001 will be a year of changing business conditions as it was in 1996.
"Barring any major economic downturn or earth-shaking disaster, the industry in 2002 is forecast to reach low double-digit growth, with a moderate but cyclical downturn in the forecast for 2003. A return to moderate growth is expected in 2004," she added.
Semiconductor revenues are expected to grow 5.8% in 2004 to $339.5 billion, said Dataquest.
In 2000, every semiconductor category is expected to finish this year with "strong double-digit growth," according to Dataquest, which plans to release more details about its new forecast during an annual chip conference in San Diego, Oct. 30-31.
Dataquest said the memory segment is showing the strongest growth in 2000, with sales on a pace to increase by more than 60% over 1999. DRAM revenue is forecast to increase 58% to $37 billion in 2000 over 1999 revenues, said the research firm.
"The industry is running at high capacity with reports of shortages and tight capacity for flash, microprocessors and some DRAM architectures," said Mark Giudici, a principal analyst for semiconductors at Dataquest. "Near-term spot pricing is reacting to inventory building and should not be confused with the overall industry supply/demand picture. Stronger demand and some product allocation in late 2000 will result in higher prices for DRAM, flash and some SRAM densities has forced lead times out beyond 20 weeks."
Dataquest said flash memory suppliers report strong bit growth and new design wins, which will prices high through 2001. Flash capacity is expected to remain tight through 2001 until new plants come on stream late neat year, said Dataquest analysts. "Demand for flash architectures has spread across all application segments," Olsson noted. "The biggest consumer of flash, cellular handsets, typically uses 2 megabytes, but densities will increase as next-generation infrastructure is increasingly deployed." |
