Feb. 24, 2003 – San Jose, CA – The worldwide semiconductor market is forecast to grow 8.9% in 2003, with revenue totaling $167 billion, up from $153.4 billion in 2002, according to quarterly forecast estimates by Dataquest Inc., a unit of Gartner Inc.

A slowdown in the market at the end of 2002 continued into 1Q03, but Dataquest analysts said that business spending on IT will return in 2H03, which will fuel demand. While the cell phone handset application segment continues to be the major driver in the market, the second phase of the market recovery requires a healthier PC market.

“There are early signs that the long-awaited corporate PC replacement cycle may indeed be about to begin, but it is too early to say that significantly increased semiconductor sales to this sector are guaranteed,” said Richard Gordon, principal analyst for Dataquest’s semiconductor research group. “There remains doubt about the business imperative that dictates upgraded PCs are required to improve business productivity, so we will likely have to wait until 3Q03 before we can gauge the strength of capital spending on IT.”

Looking long term, Dataquest analysts said a combination of pent up demand and under-investment in fab capacity is likely to act to spur semiconductor unit shipment growth and to stabilize device pricing making prospects for strong growth in 2004 and 2005.