SIA forecasts boom in chip market in 2001

SV News Service
Santa Clara

Driven by strong demand for communications and consumer electronics products, global 2000 chip sales are expected to grow 37 percent to $ 205 billion. Just five months ago, the SIA had forecasted a 31 percent growth to $ 37 billion.

Next year, sales will reach $ 249 billion. By 2003, global chip sales are expected to reach $ 319 billion, the SIA forecasted. ”Demand remains robust for chips used in the Internet and in
telecommunications and consumer products,” said George Scalise, President, SIA.

The latest SIA forecast shows that chips for data networking, broadband, wireless, optoelectronics as well as personal computers will spur the gains. “The PC is still a major growth driver, but for much of the industry there have faster growth opportunities associated with the new information-based economy,” said Wilfred Corrigan, Chief Executive, LSI Logic, the chipmaker who presented the SIA forecast at the group’s annual forecast dinner in Santa Clara.

Craig Barrett, CEO, Intel added that sales of its networking, communications and wireless chips were growing roughly by 50 percent or more a year, much faster than sales of personal computer microprocessors, which are growing at the rate of about 10 percent.

Corrigan said that the market for ICs is broadening beyond personal computers, and more geographic areas are consuming a larger piece of the IOC pie–trends that will help moderate the volatile boom and burst business cycles that have characterized the chip industry for the past 40 years. Ten years ago, the two largest chip markets, the United States and Japan used to consume 75 percent of the world’s ICs. Today, the two biggest markets-the United States and Asia-Pacific–account for less than 60 percent.

In the Americas, chip sales should rise 34 percent this year to $ 64 billion and 21 percent next year to $ 77 billion. The European market will grow 33 percent this year to $ 42 billion and 21 percent next year to $ 51billion. Japanese sales should increase 42 percent this year to $ 46 billion and 22 percent next year to $ 56 billion. And in the Asia Pacific region, sales should gain nearly 41 percent this year to $ 52 billion, 24 percent next year to $ 65 billion.

Product wise, DRAMs and general purpose microprocessors are not the fast growing sectors any longer.
l Flash memory chips, popular in cell phones, are forecasted to more than double to $ 23 billion in 2003 from an estimated $ 10 billion this year.

  • Digital signal processors, or DSPs, used in mobile phones, are forecasted
    to more than double to $ 13 billion by 2003 from $ 6 billion this year. Texas
    Instruments Inc, Lucent Technologies Inc and Motorola Inc are among the biggest makers of
    DSPs.

  • Logic devices, which include programmable logic ICs are forecasted to
    rise to $ 56 billion during the next three years, from $ 34 billion this year. 

  • DRAMs, should see sales rise 68 percent to $ 52 billion in 2003 from $ 31
    billion this year.

  • Sales of microprocessors are expected to rise 11 percent this year to
    $ 30 billion and to $ 38 billion in 2003.

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