The Semiconductor Industry Association (SIA) is projecting an industry recovery with double-digit growth over the next two years. Worldwide sales of semiconductors are expected to increase by 1.8% in 2002, by 19.8% in 2003, and by 21.7% in 2004.
AMD Chairman W. J. (‘Jerry’) Sanders III presented the new forecast at the SIA’s 25th Annual Forecast and Award Dinner held in San Jose, CA.
‘The long-awaited recovery is under way,’ said Sanders. ‘We believe the next several years will see steady growth following the industry’s steepest-ever decline in 2001.’ Sanders noted that worldwide semiconductor sales are now projected to surpass the peak revenues of 2000 in 2004.
‘It is now clear that 2000 was a bubble that distorted the industry’s compound annual growth rate, pushing it above 16%,’ said Sanders. ‘We believe that compound annual growth rates in the range of 8 to 10% will be the norm going forward over the longer term. This will represent a sea change for our industry. We can no longer count on the proverbial rising tide that lifts all boats. Nevertheless, a huge industry with compound annual growth averaging 8 to 10% will continue to offer opportunities for significant growth for companies that consistently deliver desirable products for their target customers,’ he added.
On the subject of world markets, Sanders said that: ‘Reflecting the rapid shift of contract manufacturing operations to the Asia-Pacific region – primarily China and Taiwan – semiconductor consumption in this region grew by 30%,’ noted Sanders. ‘In 2001, the Asia-Pacific region accounted for 29% of worldwide semiconductor consumption. In 2002, we project that this number will rise to 37% – the largest one-year shift in consumption patterns in history.’
The Americas, on the other hand, will decline 12% to $31 billion in 2002, and then grow 14% to $36 billion in 2003, 22% to $43 billion in 2004, and then decline 4.6% in 2005 to $41 billion.
The market in Europe will decline 9.0% in 2002 to $27 billion, and then grow 18% to $32 billion in 2003, 19% to $39 billion in 2004, and decrease 1.0% to $38 billion in 2005, while the Japanese market will decrease 7.5% to $31 billion in 2002, increase 22% to $37 billion in 2003, 18% to $44 billion in 2004, and then remain nearly flat, decreasing at 1.3% in 2005 to $43 billion.
Of all the semiconductor regions, the Asia Pacific Market will experience the strongest growth in 2002 with sales increasing 30% to $52 billion, and should continue growing in 2003 and 2004 by 24% to $64 billion and 25% to $80 billion, respectively. Like the other markets in 2005, Asia Pacific will experience a slowdown, reporting growth of 3.0% to $83 billion.
The total semiconductor market is expected to experience a slight increase in sales in 2002 of 1.8% to $141 billion. In 2003, the SIA forecasts growth of 19.8% to $169 billion, 22% to $206 billion in 2004, and then remain flat at $206 billion in 2005.