Hey ! Hey ! Larry Dudash
A service of Semiconductor Business News, CMP Media Inc.
Story updated at 5:15 p.m., EDT/2:15 p.m., PDT, 7/30/98
Chip sales could fall lower
if economies weaken, says report
SCOTTSDALE, Ariz -- Worldwide semiconductor revenues will drop 12% to $121 billion compared to $137 billion in 1997, but the decline could be as much as 15% if the world economies suffer additional setbacks in the second half of the year, according to a new forecast released today by ICE Corp. here.
The research firm also said it sees no improvements in chip market conditions in 1999 and is predicting that semiconductor revenues will be flat next year.
"Unit shipments also are expected to decline for the year by -2% for integrated circuits and -3% for discrete semiconductors," said Bill Groves, ICE's market research vice president. "This decline in unit is alarming because it counters the trends of previous industry recessions where unit volumes have increased due to lower average selling prices."
The ICE analyst said most of the troubles are related to financial turmoil in Asia. "DRAM production shows only minor slowing in the face of steadily dropping prices," he said. "In fact, U.S. spot DRAM prices average about $1 per megabit. In addition to the DRAM glut, PC sales in Asia/Pacific have slowed dramatically in an area that consumes about 25% of the worlds PCs," Groves added.
In North America, chip sales could slide by as much as 14% to $39.4 billion in 1998, according to the ICE mid-year forecast.
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