PC semiconductor decline nearly over

The PC semiconductor revenue decline that began in late 2000 will end in 2002, according to a new report issued by IDC. Although recovery will begin to show in the second half of 2002, the path will be bumpy.

IDC forecasts revenues in the total world-wide PC semiconductor market will rise from $36.3 billion in 2001 to $37.6 billion in 2002 – a modest rise of about 3.4%. The desktop PC semiconductor part of the market will rise from $28.1 billion to $29.1 billion, or by approximately 3.9%. Mobile PC semiconductor revenue will rise by approximately 1.6%, from $8.3 billion to $8.4 billion.

‘Through all of 2001, PC chip suppliers struggled with a collapse in demand, extended oversupply, and dramatic price wars. The result was a record 35.7% decline in total desktop and mobile PC semiconductor revenue,’ said Shane Rau, senior analyst for IDC’s Semiconductor: Desktop and Mobile PCs Research program.

‘While we predict that revenue will be slightly positive this year, the conditions that led to the decline persist in pockets around the industry and will depress overall revenue for at least the first half of this year.’

The return of notable revenue growth will not happen until 2003, when IDC predicts that total revenues will grow at healthy pace, driven by a strong PC replacement cycle. In the long run, however, growth will not surge like it did in 1999 and 2000. In fact, a return to the record revenue levels of 2000 is at least another 5 years off.

In terms of semiconductor components, world-wide x86 desktop and mobile PC microprocessor revenue will set the tone of the year with modest growth of 3.8%, ending at $23.4 billion. PC DRAM revenues, disastrous in 2001, will grow by 15.9% to $5.7 billion. One notable area of growth will be in the revenues of core logic chipsets that integrate graphics controllers, growing by almost 36%, to nearly $2.4 billion.

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