Global semiconductor sales are expected to fall 32 percent this year because of lower chip prices resulting from sluggish sales of personal computers and other digital devices, according to the World Semiconductor Trade Statistics (WSTS) industry group.
Semiconductor sales are expected to fall to US$139 billion -- from US$204 billion last year -- the industry group said in a release which summarized its autumn forecast session held in the Netherlands from Oct. 9 to Oct. 12.
WSTS members include about 90 percent of companies in the industry. In May, the trade group had expected sales to fall 14 percent to US$177 billion this year.
The industry group, whose members include Intel Corp, the largest chipmaker, and STMicroelectronics NV, Europe's biggest, said it expects a moderate improvement in the fourth quarter this year, adding growth will resume next year.
"It has become obvious, however, that the decline in the second quarter was more dramatic than expected and the third quarter would show a further significant downturn," an official from the industry group said.
To combat slower demand, Royal Philips Electronics NV, Europe's No. 3 chipmaker, and rivals such as Siemens AG are cutting thousands of jobs.
Demand for semiconductors this year is expected to fall 44 percent in the US, 23 percent in the Asia-Pacific region and 27 percent in Japan, the WSTS said. European demand is seen falling 31 percent this year, the industry group said.
After the recovery in the fourth quarter, overall demand is expected to grow 2.6 percent next year, the group said.
Sales of dynamic random-access memory chips, the main memory in PCs, will probably plunge 61 percent to US$11.3 billion this year from US$28.8 billion last year, the group said. After then, the revenue will rise to US$18.7 billion in 2004, up 65 percent from this year.
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