Wed, Nov 01, 2000 - Page 1 News List

Semiconductor market set to see growth next year

TECHNOLOGY SECTOR A group of the world's top chipmakers is forecasting that worldwide sales will grow 20.3 percent, reaching US$250 billion


The world semiconductor market is set to grow in value by 20.3 percent next year from a year earlier to US$250.02 billion, driven by Internet expansion and brisk demand for cellphones, a Japanese industry group said yesterday.

The projection, based on a statistics from the world's major semiconductor makers, was in line with a previous forecast of 20.2 percent growth, despite emerging concern about weakening demand for chips.

The Electronics Industries Association of Japan said it expected the global chip market this year to climb 39.2 percent to US$207.89 billion, up from its May forecast of a 30.6 percent rise.

The estimate was tabulated by the World Semiconductor Trade Statistics (WSTS) organization, which represents 68 chipmakers such as Intel Corp, NEC Corp, Samsung Electronics Co Ltd and Winbond Electronics (華邦電子).

"Chip demand earlier this year was very strong, thanks to soaring demand for flash memories used in cellphones and DRAM used in personal computers," said Osamu Yamashiro, head of WSTS Japan. "Healthy chip growth is expected in 2001 on strong demand for both wireless and wire telecommunications devices worldwide."

Despite roaring chip demand earlier this year, DRAM prices have begun falling since mid-year, due in part to weakening cellular telephone sales and a slowdown in computer sales in the US.

Asked whether the recent DRAM price drop was factored into the latest estimate, Yamashiro said: "Because we represent chip producers, we cannot comment on product prices, but the revised estimate reflected the latest outlooks of chipmakers."

Investor worries about falling global chip demand, fuelled by Intel's sales estimate cut in September, have sent shares in global semiconductor makers down sharply in the recent months.

"Chip producers are concerned about the overall weakness in high-tech stocks because this could potentially slow down global economies," another WSTS official said.

However, the estimates -- compiled into the consensus projection -- showed wider differences than for the previous report in May in terms of forecasting when the global chip market would hit bottom, he said.

Some expected demand to be at its poorest in 2002 and others in 2003.

In 2002, the worldwide semiconductor market is expected to rise by 11.1 percent to US$277.68 billion, against a previous forecast of a 13.6 percent rise to US$266.29 billion. It is seen growing in 2003 by 10.4 percent to US$306.67 billion, against a previous estimate of 8.5 percent to US$288.98 billion.

The market for DRAM will increase by 28.7 percent to US$41.65 billion in 2001 after jumping a steep 56.2 percent to US$32.36 billion in 2000, the WSTS said.

In May, it forecast a 28.6 percent rise to US$36.50 billion in 2001 and a 37 percent rise to US$28.37 billion in 2000 after a jump of 47.8 percent in 1999.

The WSTS estimated the growth rate of the DRAM market at 9.5 percent in 2002 to US$45.60 billion, and 9.3 percent in 2003 to US$49.84 billion. In May, it forecast a 14.9 percent rise to US$42 billion in 2002 and 6.9 percent rise to US$44.8 billion in 2003.

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