Chips are hot and getting hotter
Future looks bright for global semiconductor market
The future for the global semiconductor market is getting brighter as a result of strong growth in many key sectors.
According to its mid-year 2004-2007 forecast, the Semiconductor Industry Association (SIA) is projecting stronger growth than previously predicted, at 28.6 per cent for 2004, with a compound annual growth rate of 10.4 per cent through to 2007.
Global sales of chips are forecast to hit $214bn in sales this year, overtaking the previous record of $204bn in 2000. The SIA also predicted sales will reach $223bn in 2005, $221bn in 2006 and $247bn in 2007.
"The industry is experiencing substantially stronger than expected growth in 2004 as a result of underlying strength in a broad range of end-user markets," said George Scalise, president of the SIA.
"We now expect that worldwide industry sales will surpass the previous record one year earlier than previously projected."
The SIA claimed stronger market conditions are being driven by healthy demand across many sectors, including PCs, consumer electronics, wired and wireless telecommunications infrastructure and mobile phones, among others.
The global growth rate for PC chips for 2004 now stands at 13 per cent, up from the previous forecast of 11 per cent. Unit sales of mobile phone processors are projected to grow by 15 per cent in 2004, due largely to the popularity of phones with built-in digital cameras and colour displays.
The global outlook might be bright, but things are not so rosy in the UK or western Europe, according to Les Billing, managing director of Microtronica.
"Those higher growth rates for the PC sector are not reflected in the UK. A lot of the growth the SIA is counting on is coming from developing nations such as China and those in eastern Europe.
"That's where the real growth is, probably about 30 per cent year on year. The western European market is just ticking over. In the UK, the growth areas are notebooks and servers, while the desktop PC market is flat."