Chip outlook for 2002 less than rosy;
But demand in Asia expected to fuel 3.1% growth
-- The San Francisco Chronicle, 6/6/2002
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The struggling semiconductor industry will continue to limp along in 2002, growing a meager 3.1 percent to generate revenues of $ 143.3 billion, an industry group said Wednesday.
And even that growth, which pales next to the double-digit growth of the 1990s, is possible only thanks to impressive demand from the Asia Pacific region, led by China, said Dwight Decker, chairman and chief executive officer of Conexant Systems, Inc., who presented the midyear forecast at a Semiconductor Industry Association luncheon Wednesday in Redwood City.
"China is really, really the key market," he said. "It's where the growth is the strongest."
While chip sales in the United States, Europe and Japan are expected to dip 3.5 percent, 1.7 percent and 14 percent respectively this year, the Asia Pacific region is likely to grow 27 percent to $ 50.57 billion, Decker said.
Last year, when the chip industry fell into the worst slump of its history, the Asia Pacific region, which includes countries such as China, Taiwan and South Korea, became the biggest semiconductor consumers and probably won't give up that position in the foreseeable future, analysts say.
"It has to do with China," said Mario Morales, vice president, semiconductors at a research firm IDC. "Today, China is the largest consumer of cellular handsets in the world and third-largest PC consumer. Next year, it'll surpass Japan to become No. 2 (in PC consumption)."
The United States is the No. 1 market for personal computers.
Contract manufacturing in Asia is growing, as companies like the Finnish mobile phone giant Nokia outsource their manufacturing to countries like Taiwan.
And the worldwide chip industry should grow at a much faster rate beginning next year, Decker said.
According to the association, the industry should grow 23.2 percent to $ 176.51 billion in 2003 and 20.9 percent to $ 213.41 billion in 2004. |
