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Electronic industries: On the road to recovery

Posted: 09 Jan 2003 ?? ?Print Version ?Bookmark and Share

Keywords:electronic equipment? semiconductor? entertainment electronics? appliances? wired communications?

The global electronic equipment and semiconductor markets are expected to return to robust growth in 2003, after two years of downturn and depression, iSuppli Corp. said. Driven by a recovery in sales of electronic equipment, component and semiconductor revenues are expected to post double-digit increases in 2003 - the year that is expected to bring relief to battered component suppliers and equipment makers.

According to iSuppli, demand for electronic systems fell significantly in 2001 as global spending on information technology and manufacturing equipment slowed. Declining demand for electronic equipment continued into 2002, with the wired communications market suffering a 19 percent decline. Consumer spending on entertainment electronics, appliances, and automobiles are reported to have countered the wired communications sales slide and held the overall equipment revenue decline to just 3.4 percent in 2002.

However, all electronic equipment markets are expected to grow in 2003, iSuppli said. Leading the way in 2003 will be PCs and mobile handsets, both generating 17 percent revenue growth. Further, the wired communications market is seen to emerge from its disastrous decline to rise by 4.1 percent in 2003. iSuppli explained that a slight seasonal downturn in Q1 of 2003 will signal the start of three quarters of relatively low growth, until a 4.7 percent seasonal uptick occurs in Q4. Despite flat quarterly growth, the revenue increase for all of 2003 is forecasted to reach 6.8 percent.

Meanwhile, electronic components - a segment consisting of semiconductors, passives, electromechanical devices, batteries and displays, experienced a modest growth of 3 percent in 2002, with displays driving the increase. In 2003, electronic component sales are seen to accelerate by 10.5 percent. Displays will again lead in this growth.

iSuppli further predicted that semiconductor revenue will rise by 11.8 percent in 2003, once again driven by a rise in end-equipment sales. While 2003 is predicted to be the year for the segment's recovery and growth, sales are expected to drop on a sequential basis during Q1. But in spite of the sequential decline, Q1 will still experience increased revenue of up to 12 percent, compared to that of Q1 '02. The semiconductor growth in 2003 is predicted to be led by optical devices, which will post growth of nearly 18 percent. Optical semiconductor sales will be driven by the comeback of the wired communications market.

iSuppli added that semiconductor revenues will be further boosted by the resolution of excess inventory issues, which depressed semiconductor revenues in 2001, and even some in 2002. After more than two years of depression, iSuppli announced that the worldwide electronics industry will see a refreshing return to growth in 2003.





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