Jerome and AMAT investors,
Beyond 'flat' recovery year, chip sales will boom 30% in 2003, says Dataquest
Lack of plant investments and new wave of systems growth will cause surge, predict analysts
Semiconductor Business News
(10/31/01 08:32 a.m. EST)
SAN JOSE -- With 2001 becoming the biggest bust year ever for the chip industry, it will take a couple of years before boom times start up again in semiconductor markets, said Dataquest Inc. today while releasing its new 2002 forecast.
The San Jose market research firm--like other forecasters--is predicting a nearly flat "recovery year" in 2002 with worldwide semiconductor revenues inching up just 3% to $152 billion from $147 billion in 2001. But in 2003, chip sales will boom with an annual growth rate of 30%, said Dataquest, which is predicting much stronger growth beyond next year than other industry forecasters.
"The slowdown in capital expenditure in 2001 will likely spill over into 2002, resulting in supply-side tightness in 2003, when a stronger demand side is expected to have returned to the market," said Richard Gordon, principal analyst at Dataquest's semiconductor group. "Improvements in the macroeconomic environment will likely fuel a PC replacement cycle and a recovery in the wired communications sector. In addition, the rollout of 2.5 generation and 3G cellular will be well under way in the 2003 time frame, boosting demand for silicon-rich handsets."
During the difficult times of 2001 and early 2002, it is important for chip manufacturers not to cut back too much in capital spending, warned Dataquest analysts, who will be presenting details on their forecasts for market trends at conference in San Francisco Nov. 8-9.
Dataquest is now predicting a 35% drop in semiconductor revenues in 2001 from the boom of 2000.
"The events of Sept. 11 compound already weak demand as consumers and businesses reevaluate electronic equipment spending," Gordon said. "Continued deterioration in device average selling prices in the third quarter of 2001 means that even a significant improvement in demand in the fourth quarter, resulting in pricing stabilization, will not be enough to prevent the industry's revenue from declining 35% this year."
Other industry forecasting groups are also calling for small growth in chip sales next year. For example, the World Semiconductor Trade Statistics (WTST) group last week issued its industry consensus forecast, predicting chip revenues would grow 2.6% to $142.4 billion in 2002. However, the industry group is more conservative in its outlook for growth beyond next year, calling for increases of 18.5% in 2003 and 15.1% in 2004 (see Oct. 26 story). |
