Global semiconductor sales expected to increase through 2006

San Jose, CA— The worldwide semiconductor industry is projected to grow 16.8% in 2004, and it will likely have a compound annual growth rate (CAGR) of 9.8% through 2006, according to a new 2003-2006 midyear forecast by the Semiconductor Industry Association (SIA).Worldwide sales of semiconductors are expected to increase 10.1% in 2003, 5.8% in 2005, and 7.0% in 2006. Industry sales will grow from $141 billion in 2002 to approximately $205 billion in 2006.

‘In 2004, growth will be led by a strong increase in memory, including a 43% jump in DRAM and a 25% increase in Flash supported by double-digit growth in other product sectors,’ says George Scalise, SIA’s president. ‘The recovery is broad based across computer, consumer and communications applications as they’ll all continue to be drivers for the industry. The forecast contemplates a return to higher IT spending levels and the emergence of multi-function products, such as smart phones. SIA’s forecast reflects the new realities of the semiconductor industry of an 8-10% CAGR, as stated in our November 2002 forecast.’

In reference to SIA’s forecasts on regional semiconductor markets and products, Scalise added that worldwide semiconductor consumption is anticipated to continue migrating from the Americas to Asia-Pacific, reflecting the outsourcing to the region of electronic equipment manufacturing, including component sourcing and design services.

SIA’s other regional findings include:

The semiconductor market in the Americas will decline 2.1% to $30.6 billion in 2003, and then grow 15.7% to $35.4 billion in 2004. In 2005, SIA forecasts that this market will remain nearly flat with a slight decline of .09% to $35.1 billion, and then resume growth of 8.8% in 2006 to $38.24 billion.

Europe’s market will grow 11.8% in 2003 to $31.1 billion; 13.6% to $35.3 billion in 2004; 4.7% to $36.9 billion in 2005; and 6.1% to $39.2 billion in 2006.

Japan’s market will grow 17.5% to $35.8 billion in 2003; 14.1% to $41.9 billion in 2004; 6.5% to $43.5 billion in 2005; and 4.9% in 2006 to $45.6 billion.

Asia-Pacific’s market will likely experience the strongest growth in the next few years. It is projected to grow 12.1% to $57.3 billion in 2003; 20.9% to $69.3 billion in 2004; 9.4% to $75.8 billion in 2005; 7.9% to $81.8 billion in 2006.

Total semiconductor market is expected to increase 10.1% percent to $154.9 billion in 2003; 16.8% to $180.9 billion in 2004, 5.8% to $191.5 billion in 2005, and 7.0% to $204.9 billion in 2006.

Global MOS logic market, which includes standard logic, standard cell, field programmable logic devices (FPLD), and a variety of application-specific products, is expected to grow 9.6% to $34.2 billion in 2003; 12.6% in 2004 to $38.6 billion, 11.7% to $43.1 billion in 2005; and 5.0% to $45.2 billion in 2006.

MOS micro device market, which includes microprocessors, microcontrollers and digital signal processors, is forecast to grow 11.0% to $42.2 billion in 2003; 13.2% to $47.9 billion in 2004; 8.3% to $51.8 billion in 2005, and 7.7% to $55.8 billion in 2006.

Global microcontroller market, driven by consumer and automotive applications, will increase 9.9% to $10.3 billion in 2003, and then grow 14.0% to $11.7 billion in 2004; 3.2% to $12.1 billion in 2005, and 18.5% to $14.3 billion in 2006.

DRAM market is expected to grow 2.9% to $15.7 billion in 2003 and 43% to $22.5 billion in 2004. In 2005, DRAMs are expected to decrease 26.8% to $16.4 billion, but will rebound in 2006 to grow to 29.6% to $21.3 billion in sales.

SIA adds that no segment more clearly demonstrates the cyclical nature of the global semiconductor market than DRAMs. While DRAMs were once used almost entirely in computers, they are now found in a broad number of consumer and communication applications.

Control Engineering Daily News DeskDavid Greenfield, editorial directordgreenfield@reedbusiness.com

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