February 3, 2004 – Worldwide semiconductor sales in 2003 topped $166 billion, besting earlier projections to achieve 18.3% growth, thanks to a big ramp-up in the second half of the year, according to data from the Semiconductor Industry Association (SIA).
Sales in December were $16.03 billion, down a fraction from $16.12 billion in November, but up 28% from a year ago. The figures ended a nine-month streak of sequential growth, but continued to build on a string of double-digit percentage increases compared with a year ago.
Leading the charge for end-market contributors in December were PC sales (DRAM up 10.6%, microprocessors up 7.9%), as well as the global wireless market, which grew 16% for the year, doubling the initial forecast. For consumer electronics, optoelectronics rose 11.6% and ASPs were up 21%. Volumes in 4Q03 were up 20% year-on-year, with DSPs growing by 11.6% and flash up 29.3%. A 32.5% increase in PLD sales helped the wireline communications segment achieve its first quarter-on-quarter growth in three years. The automotive market also showed growth, accounting for 8.1% of end-market demand for semiconductors and a 10.3% increase in sales of dedicated chips.
Seasonal demand kept capacity utilization remained above 95% for all of 4Q03, and SIA expects it to trend modestly down in 1Q04, following historical patterns.
Geographically, all markets reported rising chip sales in 4Q04, posting a moving three-month average of 10%-14%, but were flat to slightly down from November to December. Year-on-year, the markets continued to soar well into double-digit growth, led by the Asia-Pacific region and Japan (34.0% and 33.9%), followed by Europe (22.1%) and the Americas (16.8%).
Currently, 2004 appears to be starting off with a better-than-expected first quarter, thanks in part to strong demand for cellular phones, said SIA analyst Doug Andrey in a Feb. 2 teleconference.
“We believe first quarter year-on-year growth in cell phones [unit volume] will be up 20%, even though it will be down 10%-15% sequentially from the fourth quarter,” he said. The wireless segment will help boost semiconductor sales with a stronger-than-normal seasonal sequential change of -1% to +1%, Andrey predicted.
Beyond that, the SIA is not ready to change its 2004 forecast from the 19.4% growth projected in November 2003, but the total for semiconductor revenues could be higher by $4-$5 billion due to the stronger-than-predicted increase in 2003.