Semiconductor growth returns but at slower pace
By Brian Fuller
Silicon Strategies
02/16/2004, 11:30 AM ET
PARIS-"The semiconductor industry's growth rate will slow to 10-12 percent on average in the coming years, slower than the traditional rate but slightly more robust than earlier predictions, an STMicroelectronics vice president said Monday (Feb. 16).
Alain Dutheil's prediction of the compound annual growth rate (CAGR) is somewhat more aggressive than that reported by the Semiconductor Industry Association, which forecasts 8-10 percent CAGR in the coming years. The industry's historic rate has been 15-17 percent since the 1960s.
The slowing growth rate has ramifications all along the electronics-industry food chain, experts have said.
"I do believe the industry is experiencing acceleration in its rate of change," Dutheil told the annual Industry Strategy Symposium-Europe here. "It will be substantially different from what it used to be."
The biggest changes, clearly, are coming from Asia, where China and other parts of the Asia-Pacific region comprised 58 percent of total microelectronics investment in 2003, he added. By 2008, China will have a 35-percent share of the world semiconductor market, he predicted.
In a separate presentation, an economist offered an encouraging outlook for high-wage countries, which have struggled with the off-shoring of high-technology jobs in the semiconductor recession.
Labor reforms and targeted investments in key technology areas have helped buoy the sluggish Germany economy, said Jean-Paul Betbeze, advisory president and CEO of Credit Agricole S.A.
"It's the very proof that in a place where the cost of labor is the highest, you have a solution," he said. "the solution is not necessarily deflation of wages but the capacity to develop some highly-specialized progress and it works out."
Similar reforms are starting to work in France, where economic output is still an anemic 1.5-1.7 percent per year. "If we invest in high-tech process, we can have a solution for high-wage countries," he said. |
