Growth Projections from SIA and VLSI Research

08/01/2002

REDWOOD CITY and SAN JOSE, CALIF. - The Semiconductor Industry Association (SIA) gave its 2002 mid-year forecast, predicting a 3 percent growth in semiconductor sales in 2002 compared to 2001, reaching a total market of $143 billion. After this modest increase in 2002, increases of 23.2 percent in 2003 and 20.9 percent in 2004 are expected. A slowdown in growth to 1 percent is predicted for 2005.

SIA board member Dwight Decker, chairman and CEO of Conexant Systems, said, "While there is still a great deal of economic uncertainty, we currently believe that the semiconductor industry as a whole will grow significantly over the course of the next 10 quarters, driven by increased sales of cellular handsets and PCs, as well as digital consumer electronics applications."

The SIA figures were broken down geographically and showed the strongest growth in the Asia Pacific region. In fact, the Americas, Europe and Japan all are expecting decreases in 2002, but the increase of 27 percent in Asia Pacific puts the growth for the whole industry on the positive side for the year.

Another projection came recently from VLSI Research, which gave its five-year view of the semiconductor equipment industry. Overall growth is expected to average 22 percent annually from 2002 to 2007. The strongest growth is in the assembly sector, with a 28 percent compounded annual growth rate (CAGR).

The chip equipment market will be $100 billion in 2007, according to VLSI Research, which almost triples the figure of $37 billion in 2002. The firm points out, however, that the market was at $60 billion in 2000, so growth to $100 billion over seven years is not as spectacular. In fact, the CAGR from 2000 to 2007 will be just 8 percent, which tells more of the story than the 22 percent CAGR from 2002 to 2007.