Perhaps someone should email this to MSDW. Read the final paragraph.
Reporter's Notebook: Execs find no unpleasant surprises at Dataquest meeting
Market researcher seems to be sticking with relatively bullish outlook
By Mark LaPedus
Semiconductor Business News
(11/01/00, 09:10:19 AM EDT)
SAN DIEGO -- There were few surprises at this week's "Dataquest Semiconductors 2000" conference here, but that's what chip and equipment makers were hoping for in many respects.
Already gearing up for anticipated strong demand for the remainder of 2000 and 2001, chip and semiconductor equipment suppliers breathed a collective sigh of relief after Dataquest analysts basically repeated their previous--and largely bullish--forecasts for the worldwide IC and end-user systems markets this week.
But it still remains unclear if the market will cooperate with these upbeat forecasts. Suddenly faced with a recent slowdown in PCs, networking equipment, and wireless handsets--coupled with a dip in some chip sectors, namely DRAMs--chip and tool makers still have plenty to worry about in the market.
And with the bearish sentiment on Wall Street, it's difficult to get a clear picture of the IC business. "I've never seen such a division between Wall Street and our analysts," observed Joe Grenier, semiconductor analyst at San Jose-based Dataquest.
"If you looking at what Wall Street is saying, you get one picture. If you look at what the market researchers say, you get another picture," noted Grenier following his presentation at the conference. "So what's real? To me, the financial people are taking a short-term view, but we see strong growth [in the semiconductor market] in both the short- and long-term," he added.
And given the projections of the end-user equipment markets, there seems to be no reason to believe that chip markets will subside--at least for 2001 and 2002. However, Dataquest and other research firms are predicting a downturn in the 2003-2004 timeframe.
In total, the worldwide electronics equipment market is projected to grow at an annual compounded growth rate of 8.4% from 1999 to 2004, Dataquest said. In total, the worldwide electronics equipment revenues will jump from $1.1 trillion in 1999, to $1.5 trillion by 2004, according to the research firm.
But the PC market is not so rosy, as the market is only expected to grow at 10.1% in terms of revenues from 1999 to 2004. The PC market is expected to grow 16% next year, from 135 million units shipped in 2000, to 157 units in 2001, Dataquest said.
On the other hand, the set-top box, Internet appliance, wireless handset, automotive, and other markets continue to show solid growth.
For example, the market for handsets is projected to grow from 290 million handsets in terms of unit shipments in 1999 to around 1 billion by 2004, Dataquest said. And set-top boxes, including satellite and cable, are projected to jump from 15 million units in 1999 to 54 million units in 2004, said analysts.
During the conference, Datquest reiterated its previous semiconductor forecast, which was outlined earlier this month. In total, the worldwide semiconductor industry is projected to show an annual compounded growth rate of 13.6% from 1999 to 2004, according to Dataquest.
Worldwide chip sales are expected to grow 37% to $232 billion in 2000 from $169 billion in 1999, followed by an increase of 27% to $295 billion in 2001, according to the Dataquest forecast. In 2002, chip sales will reach $336 billion, a 14% increase, the forecast said.
One of the few glitches in the market is the DRAM segment, which has taken a hit in terms of prices and demand, due to weakness in the PC market. In fact, DRAMs are in what some call an oversupply mode, but many suppliers believe that will be a short-lived event.
"It's only a matter of time before demand outstrips supply," said Avo Kanadjian, vice president of marketing for Mountain View, Calif.-based Rambus Inc., in an interview at the conference. "But I don't know when that will happen," he said. "It could be March or April [of 2000]."
Others believe that demand will pick up a bit later. "I believe you will see [DRAM] shortages by mid-2001," said Rajit Shah, vice president of marketing for Taiwan's Mosel Vitelic Inc., a supplier of DRAMs and other products.
Other chip markets remain robust, especially communications. In fact, some vendors believe they will outpace Dataquest's overall IC forecast by a long shot.
"Dataquest's forecast [for 2000] is too low," said D. Christopher Keil, strategic marketing manager for Milpitas, Calif.-based LSI Logic Inc. "We're looking at growth rates from the high-30's to low-40's [in terms of percentage.]"
Not surprisingly, the wafer foundry business is also solid. "I haven't seen any softening in the market," said Dennis Tachick, executive vice president of silicon foundry specialist ESM Ltd. of the U.K. "I don't see any softening at least until the end of 2002," he said.
Even the equipment makers are bullish. "We don't see any signs of a downturn," said Philip Ware, director and general manager of marketing for the Semiconductor Equipment Division at Canon U.S.A. Inc. "There are some pockets of weakness, but this doesn't reflect our backlog," said Ware, who is based in Irving, Tex. "We're sold out until 2002." |
