Sales of Chips Predicted to Set Record in 2004
The New York Times
June 10, 2004
By LAURIE J. FLYNN
SAN FRANCISCO, June 9 - The nation's leading semiconductor trade
group said Wednesday that chip sales this year would set a record as the
economy improves and demand for personal computers and
cellphones continues to climb.
In its midyear report, the group, the Semiconductor Industry
Association, projects that worldwide sales of semiconductors will grow to $214 billion
this year, surpassing the $204 billion record set in 2000.
The group forecasts that worldwide chip sales this year will
increase nearly 29 percent over 2003; last fall, it projected growth
of 19 percent this year.
"The industry is experiencing substantially stronger-than-expected
growth in 2004," said George M. Scalise, president of the association, which is
based in San Jose, Calif. He said the chip industry was benefiting
from growth in many areas, including personal computers, electronics,
cellphones, telecommunications equipment and even automobiles.
Strong demand for equipment used for wireless Internet connection is also
contributing to growth in chip sales.
"The current cycle appears to be one of the more balanced cycles
in the history of the industry, with growth coming from a very broad range of
applications and in all geographic regions," Mr. Scalise said.
The association's report comes just a week after Intel narrowed
its revenue forecast for the current quarter to the upper end of its earlier range,
citing surprisingly strong sales of cellphones and other electronics products.
In more good news, capital spending for telecommunications is
expected to grow 5 to 10 percent in 2004 - the first increase since 2000, the
association said.
John Greenagel, a spokesman for the association, said much
of the growth in sales was coming from China, which makes up 15 percent of the chip
market. Chip sales in the Asia-Pacific region have grown to 40 percent
of the worldwide total.
Personal computer sales continue to account for the biggest
portion of sales, representing roughly 30 percent of the chip market. They are expected
to increase 13 percent in 2004, compared with the association's
November 2003 forecast of 11 percent.
The growth is being driven not just by an increase in the number of devices
sold but also by the rising number of chips used in digital electronics.
Digital video recorders, for example, have four times the semiconductors
of DVD players, and are selling at three times the rate of 2003. Similarly,
the semiconductor content in cars is increasing about 10 percent a year.
Looking ahead, the industry association projects a compound annual
growth rate of 10.4 percent from 2004 through 2007, though sales are
expected to decline in 2006 and then rebound in 2007.
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