Former blockbuster year 2000 is about to be outdone by 2004, as the Semiconductor Industry Association (SIA) now expects record semiconductor sales this year, boosted by higher than expected growth of 28.6 percent.

The news came today from the industry group's mid-year forecast, which called for sales of $214 billion to surpass the $204 billion recorded in 2000.

A further compound annual growth rate (CAGR) of 10.4 percent through 2007 was estimated. Growth will slow next year to 4.2 percent and decline by 0.8 percent in 2006 before rebounding to 11.7 percent growth in 2007, when industry revenues are projected to reach $250 billion, SIA reported.
 
"The industry is experiencing substantially stronger than expected growth in 2004 as a result of underlying strength in a broad range of end-use markets," said SIA President George Scalise said in a statement. "We now expect that worldwide industry sales will surpass the previous record one year earlier than previously projected. For the longer term, we project a compound annual growth rate of 10.4 percent through 2007 when we expect that worldwide sales will reach a quarter of a trillion dollars. While this growth rate is lower than the historical growth rate of the past several decades, it represents very healthy growth for a $200-plus-billion industry."

Industry stimuli will come from across the board, according to the SIA, which revised its forecasts for several product categories.

PC sales, which represent approximately 30 percent of the semiconductor market, are now forecast to grow by 13 percent in 2004 compared to an earlier forecast of 11 percent growth.
 
Unit sales of cellular phones are projected to grow by 15 percent in 2004, the group said, noting that newer cell phones also have a higher IC content due to the increased sales of units with digital cameras, color displays and enhanced data capabilities.

Consumer electronics will stay strong with digital camera sales growing by 27 percent in 2004 compared to the earlier forecast of 14 percent growth. DVD players are predicted to grow by 10 percent -- lower than the 30 percent growth forecasted, but on a larger-than-expected base following strong growth in 2003. Sales of digital video recorders (DVR), however, are experiencing explosive growth -- nearly triple the unit volume of 2003 -- and DVRs have four times the semiconductor content of DVD players.

Capital expenditures for telecommunications, including broadband and Wi-Fi, are now expected to grow in the 5 percent to 10 percent range in 2004 -- the first increase since 2000, SIA noted.

The automotive market is expected to continue to grow as the semiconductor content per automobile is increasing by 10 percent each year, SIA said.

"The current cycle appears to be one of the more balanced cycles in the history of the industry, with growth coming from a very broad range of applications and in all geographic regions," Scalise commented.

By: DocMemory
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