Worldwide chip industry expected to rebound in '98
Reuters, Wednesday, October 29, 1997 at 20:43
SAN JOSE, Calif., Oct 29 (Reuters) - The worldwide
semiconductor industry will end 1997 with sluggish growth of
5.5 percent, reaching $131.9 billion in sales, but a rebound is
expected next year, the Semiconductor Industry Association said
in its annual forecast.
"This year can be characterized by one word -- recovery --
and 1998 should be even better for the semiconductor industry,"
SIA president George Scalise said in a statement.
This year the semiconductor industry was recouping from its
first drop in sales in almost 10 years, due to a collapse of
memory chips prices and an ensuing inventory glut in 1996.
The SIA also said that, for the first time, its growth in
1997 was hampered by the stronger U.S. dollar against foreign
currencies in Europe and the Japanese yen.
Before the impact of the stronger dollar, the SIA said that
1997's growth rate would have been 10.4 percent.
"This is the first year in memory when currency
fluctuations have had a demonstrable impact on dollar-based
growth rates," the SIA said.
In 1996, global chip sales fell 8.6 percent to $132
billion, the first drop in almost 10 years. Sales last fell in
1985, tumbling 30 percent amid an industry recession.
The SIA said it is confident the industry's historical
double-digit growth rates will return in 1998, 1999 and the
year 2000, based on an expectation that the memory chip market
will rebound in 1998 and based on the "world's fascination with
electronic products."
New growth in semiconductors will also come from continued
expansion of the Internet and the development of new
applications for personal computers and other consumer
electronic devices.
The SIA said its forecast is compiled by the top market
researchers at 70 semiconductor companies.
In 1997, the SIA said microprocessor sales grew 27.6
percent and were the best-selling product, surpassing DRAM
(dynamic random access memory) chips in total sales. Intel Corp
(NASDAQ:INTC) is the world's biggest maker of microprocessors.
DRAMs are likely to regain the lead as the largest
semiconductor product category in 2000, the SIA said.
Total sales of microprocessors rose to $23.6 billion in
1997, up from $18.5 billion in 1996. In 1998, processors will
jump 20.4 percent to total sales of $28.4 billion, then growth
rates slow slightly, with 19.6 percent growth in 1999 to $34
billion and 19.3 percent growth in 2000 to $40.6 billion.
DRAM chips reached an all-time high of $40.8 billion in
1995, a surge of 74.4 percent, fueled by an explosion of sales
in the PC industry. Pricing collapsed in 1996, with sales
sliding to $25.1 billion, a drop of 38.5 percent.
The inventory glut problems also carried over into 1997 and
DRAM sales fell another 16.9 percent to $20.8 billion.
The SIA forecasts a return to growth in DRAMs throughout
the rest of the decade. Sales are expected to increase 20
percent in 1998 to $25 billion, 28.5 percent in 1999 to $32.2
billion and a 29.7 percent jump in 2000 to $41.7 billion.
Micron Technology (NYSE:MU) is the largest U.S. DRAM maker.
Asia-Pacific continues to be the fastest growing
semiconductor market, where sales increased 10.2 percent in
1997 to $30.3 billion. Asia-Pacific represents 21.8 percent of
all chip sales. In 2000, it will be 24.3 percent.
The Americas, which is dominated by the U.S. market, had a
9.7 percent increase to $46.8 billion. The Americas represents
slightly more than one-third of all global sales. In 1998, the
region should see a jump of 17.2 percent to $54.9 billion.
Japan, hard hit by fluctuations in the yen, saw sales drop
1.9 percent in 1997, to $33.5 billion. Japan is 24.1 percent of
the world market. A dramatic turnaround is expected in 1998,
where sales will increase 12.2 percent to $37.6 billion.
Europe, which is about 20.4 percent of the world market,
saw its sales increase 3.2 percent in 1997, as sales reached
$28.4 billion. Next year, European sales should jump 17 percent
and in 2000, chip sales in Europe are expected to reach a new
high of $47.5 billion, up 19.9 percent.
Copyright 1997, Reuters News Service |
