Worldwide chip sales are expected to reach a peak of $295bn next year, but the market will hit a downturn in 2003, according to figures from research analyst Dataquest.
The global semiconductor market is expected to grow by 37 per cent this year to reach $232bn. But growth rates will be lower over the following years and will fall by 4.5 per cent by 2003. However, in 2004 the market will bounce back with a 5.8 per cent growth in sales.
The memory segment is showing the strongest growth and DRam turnover in particular is forecast to increase by 58 per cent to reach $37bn this year. This market will reach a peak of $76bn in 2002, but will then fall in line with other market segments in 2003.
The semiconductor market tends to be cyclical as manufacturers increase capacity to meet demand, and prices go up. But when capacity overtakes demand prices plummet and lead to a downturn in growth.
"Barring any major economic downturn or earth-shaking disaster, the industry in 2002 is forecast to reach low double-digit growth, with a moderate but cyclical downturn in 2003. A return to moderate growth is expected in 2004," said industry analyst Mary Olsson.
IBM is set to invest an additional $5bn in chip-making plants around the world. The prime result of this will be a new $2.5bn fabrication plant in New York, which is scheduled to open in the second half of 2002.
The company also plans to expand its Altis Semiconductor joint venture with Germany's Infineon Technologies, as well as chip-packaging operations worldwide.
Big Blue said it expected to be the first chip maker to mass-produce semiconductors at microscopic line widths below 0.10 microns, which is far thinner than the 0.18 micron technology used at present.
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