Joe, nothing is going to happen anytime soon unfortunately:
Chip Revenue Will Slow, Report Says
(03/17/98; 4:47 p.m. EST)
By Patrick Waurzyniak, Electronic Buyers' News
Lingering overcapacity problems, price volatility in
memory devices, and the continued sluggishness of
Asian economies will combine to dampen worldwide
semiconductor revenue growth this year, with the
memory market shrinking 9.7 percent in 1998,
according to new research released Tuesday by market
researcher International Data Corp.
Mirroring an earlier report of softness in the chip
business issued by the Semiconductor Industry
Association, the prolonged Asian economic slump is
forecast by the Framingham, Mass.-based researcher
to wreak havoc with the semiconductor industry's sales
throughout this year. The SIA's latest numbers, which
the Mountain View, Calif.-based trade association
released just last Wednesday, showed the worldwide
chip industry's revenue down by 4.5 percent in January
from December 1997 levels, while the SIA's latest
quarterly three-month average for November to
January showed semiconductor sales down by 8.5
percent.
The sagging Asian economies and continued price
volatility in the memory segment have dampened, but
not fully extinguished, worldwide semiconductor
revenue growth, according to IDC, which pegged
anticipated worldwide chip growth to reach 8.4 percent
growth and $148.7 billion in sales this year.
IDC's 8.4 percent growth rate forecast for 1998 is a
reduction from a mid-1997 estimate of 15.1 percent, but
the market researcher said as memory revenue begins
to rebound in 1999, the market will return to double-digit
growth rates, eventually reaching $272.4 billion by 2002.
According to IDC's new research report, the overall
worldwide memory market will shrink 9.7 percent this
year to $26.5 billion.
Among IDC's findings are that a lingering overcapacity
situation will hit dynamic RAM vendors especially hard,
with DRAM revenue expected to drop 13.9 percent to
$17.2 billion this year, after last year's 21.2 percent
decline. IDC said it is expecting major capacity
cutbacks to stabilize memory pricing by the fourth
quarter of 1998, and the market researcher said it
believes stable prices in combination with strong bit
growth will drive memory revenue up in 1999 and
beyond.
"Although the Americas regions will be the strongest
region for growth this year, the economic crisis in Asia
has sent waves of uncertainty across every region and
has caused us to decrease our forecast for 1998," said
Mario Morales, IDC's research director of
semiconductors. "Japan is of most concern because of
current economic and political instability."
IDC is anticipating that Japan's 4.8 percent revenue
growth estimate for 1998 to be the weakest of any
region.
A lone bright spot in the chip business is the
microprocessor segment of the industry, which IDC
said it expects to expand 24.9 percent to $29.3 billion in
1998. "Despite a trend toward lower-priced processors
to feed the demand for sub-$1,500 PCs, healthy unit
growth for both the computing and embedded segments
of the market will fuel the processor market," said Kelly
Henry, senior research analyst of semiconductors.
The IDC report says the U.S. semiconductor market
will reach revenue of $94.5 billion in 2002, but European
consumption share will remain flat throughout the
forecast period. It also found the Asia-Pacific region
will surpass Japan in revenue size by 1999.
The report, Semiconductor Market Forecast and
Review, 1997-2002, breaks out the worldwide
semiconductor market by seven major product
segments: metal oxide semiconductor (MOS) memory,
MOS microcomponents, MOS Logic, Analog, Discrete,
Optoelectronics, and Bipolar digital. The report gives
five-year forecasts across four geographic regions,
including Americas, Europe, Japan, and Asia-Pacific.
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