October 24, 2001 – Tokyo, Japan – The global semiconductor market will likely decline by 32.1% in 2001 to $138.8 billion, the World Semiconductor Trade Statistics (WSTS) said recently.

In 2002, WSTS forecasts that the market will remain stable, with a slight 2.6% gain. It expects the market to growth, however, by 18.5% in 2003 and 15.1% in 2004.

The WSTS, which counts 69 chipmakers as its members, compiles forecasts each spring and fall. As of May, growth in 2001 was expected to fall by 13.5% with a 13.9% increase in 2002. But these figures were revised lower.

Slumping demand for cellular phones and personal computers, as well as lower consumer spending after the terrorist attacks on the US, are expected to take their toll on semiconductor sales.

The WSTS believes that for the fourth quarter of 2001, semiconductor sales will rise from the previous year, with a mild rebound expected next year.

But a Toshiba executive said that “there will definitely be a impact from the terrorist attacks on year-end holiday sales.” Fears are growing quickly that the semiconductor market will fall even further.

Many believe that no real rebound will take place until end of next year or later. Consequently, it is quite possible that WSTS estimates will be revised even lower.

Japanese semiconductor firms have been restructuring by cutting staff and consolidating plants. With no rebound on the horizon, NEC Corp. and Hitachi Ltd. this fall announced additional restructuring measures including more plant consolidations.

Many analysts expect companies to announce additional restructuring measures due to the dire economic conditions.