Worldwide sales of semiconductors rose to $166.4 billion in 2003, up 18.3% from the $140.8 billion in global revenue recorded in 2002, according to the Semiconductor Industry Association (SIA).
The industry’s second half 2003 performance was one of the strongest on record, supported by US GDP growth of 8.2% in the third quarter and 4.0% in the fourth quarter, and the satisfying of pent-up demand dampened in the run-up to the Iraq war.
The industry recorded an 11% sequential revenue increase to $48.1 billion in the fourth quarter from $43.3 billion in the third quarter, and a 28% rise in year-over-year revenue in December of 2003.
PC sales were a major contributor to growth in the year’s fourth quarter, with DRAM revenue up 10.6%, and Microprocessors up 7.9% in the December quarter over the September quarter. The global wireless market was also very strong, growing 16% in 2003, double initial forecasts. In 2003’s final quarter, year-over-year volumes were up 20%, with Digital Signal Processors rising 11.6% in the quarter and Flash up a hefty 29.3%. The wireline communications market turned in a positive performance in 2003’s final quarter for the first time since 2000, with Programmable Logic Devices up 32.5%.
Global consumer electronics markets also grew briskly during 2003’s final quarter. Optoelectronics rose 11.6% and Application Specific Products for consumer were up 21%. Semiconductors are increasingly pervasive in automobiles, with the automotive market now 8.1% of end demand for semiconductors and dedicated chips up 10.3% in the fourth quarter of 2003.
Capacity utilisation exceeded 95% in the fourth quarter, propelled by strong seasonal demand, and should trend modestly down in this year’s first quarter, reflecting historical industry patterns.
All geographic markets recorded rising chip sales in the final quarter of 2004, with sales in Europe up 14.5% sequentially, Japan up 10.5% in the quarter, sales in the Americas up 10.2%, and Asia Pacific revenue up 10.0%.
The SIA’s Global Sales Report (GSR) is a three-month moving average of sales activity. The GSR is tabulated by the World Semiconductor Trade Statistics (WSTS) organisation, which represents approximately 66 companies. The moving average is a mathematical smoothing technique that mitigates variations due to companies’ monthly financial calendars.