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World chip sales down 32% during 2001

Rather worse than earlier estimate of 14% fall

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Last May, the World Semiconductor Trade Statistics team forecast global chip sales would fall 14 per cent during 2001. If only. Nearly six months and the WSTS' prognosis is worse - much worse. The market will be down 32 per cent - more than double the organisation's previous prediction.

Announcing this dire statistic, the WSTS said: "It has become obvious that the decline in the second quarter was more dramatic than expected and the third quarter would show a further significant downturn."

Essentially, then, the upturn everyone expected in Q3 simply didn't happen. To what extent the events of 11 September are to blame is hard to say - though that's almost certainly what many chip makers will claim. Certainly September traditionally far stronger demand than July and August combined, and the third month of the quarter failed to live up to expectations.

Come 2002, the WSTS expects that 2001's overall chip sales will amount to around $139 billion, well down on last year's record sum of $204 billion and rather worse than the $177 billion the organisation forecast last May.

Demand, the organisation reckons, dipped the most in North America, where sales will be 44 per cent down on 2000's figure. Europe is next with a dip of 31 per cent, followed by Japan (27 per cent) and Asia-Pacific (23 per cent).

Not surprisingly, the memory market has taken the heaviest damage, with the final annual sales figure likely to come in at around $11.3 billion - down 61 per cent on 2000.

That's broadly in line with market watcher Gartner's estimates, published last week. Gartner reckons the market will have fallen 67 per cent by the end of the year. However, the WSTS is rather more optimistic about 2002 than Gartner. While the market research organisation is forecasting a 19 per cent fall next year, the industry sponsored expects significant growth: sales will rise 65 per cent on 2001's total, to $18.7 billion.

And the chip market will grow by the more modest sum of 2.6 per cent, the WSTS believes, on the back of an upturn in Q4. We'll see, but our feeling is that the market will at best be flat through the coming months or worse, depending on the extent to which consumer confidence picks up in the pre-Christmas period. ®

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