SIA slightly raises Q3 chip forecast
Mark LaPedus
08/04/2003 1:50 PM EST
SAN JOSE, Calif. -- The Semiconductor Industry Association (SIA) has slightly raised its chip forecast for the third quarter of 2003, although the trade group has not altered its 10.1 percent growth prediction for 2003.
After flat growth in the second quarter of 2003, the semiconductor industry is expected to show 5 percent to 8 percent growth in the third period of this year, said Doug Andrey, principal industry analyst for the SIA today (Aug. 4). That figure is 0.5 percent to 1 percent higher than the original projection, Andrey said.
"We think the third quarter will be better than expected," he said. "We are more optimistic about the third quarter."
The slightly improved forecast reflects falling chip inventories in the market and higher fab-utilization rates for leading-edge capacity. Demand for flash memories, logic, and optoelectronics remains robust, but digital signal processors (DSPs), DRAMs, and microprocessors fell into negative territory during the second quarter.
The SIA, meanwhile, is still projecting 10.1 percent growth for 2003. The trade group is not changing its forecast for the year, due to lack of visibility in the fourth quarter, Andrey said during a conference call.
Still, the projection for the third quarter indicates that the market is improving. Worldwide sales of semiconductors were $12.54 billion in June, up a mere 0.3 percent from $12.50 billion in May 2003 and up 10.4 percent from $11.35 billion in June 2002, according to Global Sales Report (GSR) figures released by the SIA. The SIA added that second quarter chip sales of $37.6 billion were up 3.2 percent from $36.4 billion in the year's first quarter, and up 10.4 percent from the $34.1 billion recorded in the second quarter of 2002 ( see today's story ).
The semiconductor industry is slowly returning to health, as excess chip inventories have become "negligible," Andrey said. In fact, chip inventories fell from $300 million in the first quarter of 2003, to $150 million in the second quarter, according to iSuppli Corp.
This compares to a whopping $2.5 billion in terms of excess chip inventories during the second quarter of 2002, according to the El Segundo-based research firm. Back in the first quarter of 2001, the channels had some $8 billion in excess inventories, according to the report ( see July 28 story ).
Another positive indicator is leading-edge fab-utilization rates, which are hovering at around 95 percent for 0.15-micron geometries and below, according to Andrey. Fab-utilization rates for 0.18-micron capacity are sitting around 88 percent, he said.
On the product front, flash memories and optoelectronics remain robust, due to demand for camera phones and related products. In 2Q, optoelectronic-based devices were up 33.9 percent and 12.4 percent year-over-year and quarter-over-quarter, respectively. In the same period, flash was up 37.1 percent and 6.3 percent year-over-year and quarter-over-quarter, respectively.
There were other winners during the second quarter. MOS logic was up 8.7 percent quarter-over-quarter and 14.7 year-over-year.
The losers in Q2 were DSPs, processors and DRAMs. DSPs were down 10.5 in the second quarter of 2003 over the first period, but were up 14.4 percent in the like period a year ago. DSPs were impacted by a slowdown in wireless in Asia, due to SARS.
The PC was also sluggish in Q2, as processors fell 4.8 percent quarter-over-quarter and DRAMs declined 0.5 percent. Processors are up 8.2 percent year-over-year, but DRAMs are down 2.7 percent for the year.
In other product markets, analog devices in Q2 were up 7.6 percent quarter-over-quarter and 9.8 percent year-over-year. Microcontrollers were up 1.7 percent quarter-over-quarter and flat for the year. |
