Dataquest cuts IC growth forecast for 2002 and 2003

NOVEMBER 11--Disappointments in the slumping IC market have prompted Dataquest Inc. (Los Angeles, CA) to cut its growth forecast for the industry by more than one-half for both 2002 and 2003.

NOVEMBER 11--Disappointments in the slumping IC market have prompted Dataquest Inc. (Los Angeles, CA) to cut its growth forecast for the industry by more than one-half for both 2002 and 2003. Late last year, Dataquest originally projected the worldwide semiconductor market would grow 3% to $152 billion in 2002, from $147 billion in 2001. But in 2003, chip sales were expected to boom with an annual growth rate of 30%, according to the San Jose-based market research firm.

In a new forecast, however, Dataquest claims the market is beginning to see signs of recovery, as revenue is projected to reach $153.3 billion in 2002, a mere 0.5% increase from 2001. In 2001, worldwide semiconductor revenue totaled $152.5 billion, a 32% decline from 2000. In 2003, the worldwide semiconductor market is projected to hit $171.8 billion, a 12.1% increase from 2002 estimates, according to a new forecast from Dataquest.

"The semiconductor market recovery in 2002 has progressed as expected, with strong growth in the first half of 2002 as inventories were replenished, and weaker growth in the second half of the year," said Dataquest analyst Richard Gordon in a statement. The worldwide digital cellular handset market is one of the few bright spots in the semiconductor industry, while PC unit production growth has stalled in 2002, according to Dataquest.

"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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