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Worldwide semiconductor market poised for growth in '03

Posted: 12 Nov 2002 ?? ?Print Version ?Bookmark and Share

Keywords:semiconductor? dataquest? electronic equipment?

Gartner Dataquest Inc. predicts that the worldwide semiconductor market will post double-digit growth in 2003 with revenue totaling $171.8 billion, a 12.1 percent increase from the firm's 2002 estimates.

In 2001, worldwide semiconductor revenue totaled $152.5 billion, a 32 percent decline from 2000. However, in 2002, the market began showing signs of recovery, as revenue is seen to reach $153.3 billion, a 0.5 percent increase from 2001.

"The semiconductor market recovery in 2002 has progressed as expected, with strong growth in 1H of 2002 as inventories were replenished and weaker growth in 2H of the year," said Richard Gordon, principal analyst for Gartner Dataquest's semiconductor research group. "Although semiconductor sales in Q3 of 2002 held up reasonably well, benefiting from a degree of seasonal strength, that strength has not carried forward into Q4 and highlights the poor state of electronic equipment production."

Dataquest said that the worldwide digital cellular handset market is one of the few bright spots in the semiconductor industry and is driven primarily by a replacement cycle as the industry shifts from 2G to 2.5G cellular, which is deemed to be beneficial for semiconductor vendors as it increases demand for silicon on rich handsets.

Further, Dataquest analysts report that while PC unit production growth has stalled in 2002, a corporate PC replacement cycle is becoming overdue and cannot be put off much longer.

"A broader-based recovery in electronic equipment production, especially in the wired communications segment, is unlikely to begin until 2004, suggesting a limited impact on semiconductor sales in 2003," Gordon said. "2003 is forecast to be a transition year, as a phased recovery in end markets gradually works its way back to fuel incremental semiconductor sales growth."

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