Tuesday, February 25, 2003
Despite the first signs of growth in the industry's toughest recession, Dataquest Inc. has downgraded its estimate for 2003 semiconductor market growth to 8.9%. This figure which would see the worldwide chip market hitting $167 billion in value in 2003, up from $153.4 billion in 2002, according to the latest quarterly forecast estimates from the market research firm.
Late last year Dataquest was predicting 12.1% growth and a market value of $171.8 billion in 2003.
The move puts Dataquest at odds with Future Horizons, another market research company, which recently raised its 2003 estimate from 15% growth to 18% growth.
The reasoning behind the Dataquest downgrade is that a slowdown in the market at the end of 2002 continued into the first quarter of 2003. However, Dataquest analysts said that while the mobile phone handset application segment continues to be the major driver of the semiconductor market, business spending on information technology products would return in the second half of 2003 to fuel chip demand and help a return to strong growth.
"There are early signs that the long-awaited corporate PC replacement cycle may indeed be about to begin, but it is too early to say that significantly increased semiconductor sales to this sector are guaranteed," said Richard Gordon, principal analyst for Gartner Dataquest's semiconductor research group, in a statement.
"There remains doubt about the business imperative that dictates upgraded PCs are required to improve business productivity, so we will likely have to wait until the third quarter of 2003 before we can gauge the strength of capital spending on IT."
Looking longer term, Dataquest analysts said a combination of pent-up demand and under-investment in fab capacity is likely to act to spur semiconductor unit shipment growth and to stabilize device pricing making prospects for strong growth in 2004 and 2005.
By: DocMemory
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