Wednesday, February 26, 2003
Semico Research is forecasting 23% growth for the semiconductor industry this year, down by 2 percentage points from the fourth quarter 2002 forecast because of lingering uncertainties in the market.
"Semico sees pent up demand in the IT sector for long overdue hardware, software and infrastructure upgrades. However, with the specter of war in Iraq looming on the horizon, corporate leaders continue to delay spending decisions and investments, adversely affecting a recovery in the semiconductor sector," the company said.
Despite fears over the Iraq situation, Semico said it sees indications that the economy is poised for a strong recovery in 2003.
Even with delayed IT and corporate spending, 2002 saw 14.3% growth in chip unit demand, but only 1.3% revenue growth, due to aggressive pricing by semiconductor vendors positioning for market share, the firm said.
Semico expects prices will continue to be weak in the first quarter, but firm up throughout 2003. Leading-edge manufacturing capacity currently stands at 90% utilization while the high-volume sweet spot is at 80%.
"With demand continuing to grow through 2003, Semico anticipates that capacity will once again become slightly constrained, helping drive up ASPs by changing the supply and demand dynamics," it added.
By: DocMemory
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