World Semiconductor Trade Statistics releases chip-shipment numbers for 2002

FEBRUARY 12--According to World Semiconductor Trade Statistics (WSTS; (www.wsts.org), its forecast of 5% growth in DSP shipments was tracking well until December. But, shipments that month ballooned to the highest monthly figure in two years. The net effect was that it raised overall DSP revenue growth to 14.1% for the year, to the $4.86 billion level. January 2003 shipments, usually a slow month, will probably drop more than normal . . . that is, unless December shipments were a precursor to a sharp ramp-up in the biggest DSP market.

Texas Instruments continues to be the dominant company in DSP, increasing its market share by a few points. However, the most dramatic change is that Motorola displaced Agere for the number-two spot in 2002--a position that Agere and its earlier incarnations (as AT&T Microelectronics and Lucent Microelectronics) held onto since 1992. Unfortunately, when Agere was spun off from Lucent Technologies last year, the new company was saddled with heavy debt and a parent (for part of the year) that was searching for market solutions.

The most dramatic change was that shipments to Japan dropped by 20% (in revenue). We suspect that much of this change was due to Japanese companies moving manufacturing to China. China dominates the Asia-Pacific category, though Korea, Taiwan, and Singapore are well represented.

Analysts have forecast overall 2003 semiconductor shipments to grow, variously, from 11% to 30%. Considering that average semiconductor growth has historically been in the 15% range, WSTS does not see 2003 as being an "above normal" year. Consequently, the forecast is for an overall semiconductor-market growth of 15%, even if the Iraq problem is resolved peaceably. For DSP, WSTS is forecasting 20% growth for 2003.

Wireless will continue to be the DSP market driver for 2002. WSTS believes that 2004 will be a recovery year for wireline (telecom) applications, with VoIP coming to the fore, and UMTS and EDGE cellphones shipping in volume then, kicking growth up to the 33% level that year and dropping to a more sedate level thereafter.