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Chip market to grow 8.3% in 2003 – Gartner

Weak PC growth

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The worldwide semiconductor market is grow 8 per cent growth this year, according to Gartner

The analyst firm forecsats that revenues will swell to $168 billion this year, 8.3 per cent up from $152 billion in 2002, despite continuing uncertainty in the market. A slightly disappointing first quarter has caused Gartner to peg back growth projections for 2003 from its previous estimates of 8.9 per cent.

"With quarterly sequential growth at about negative 3.5 percent in the first quarter of 2003, but likely to turn mildly positive in the second quarter, it appears that the industry is capable of growing in the high single digits this year," said Richard Gordon, research vice president for Gartner's semiconductor research group.

Gartner notes that wider economic worries about the effect of the war in Iraq, and the outbreak of the severe acute respiratory syndrome (SARS) virus in Asia, have recently receded.

This has prompted the analyst firm towards optimism about a rebound in the market despite what it describes as difficulty in gauging demand for semiconductors during 2H2003.

Gartner analysts said that businesses are not yet feeling confident enough to upgrade corporate PCs. However sluggish growth in this segment is being offset by growth in components for digital cellular handsets, flat-panel displays and digital video consumer products. Low channel inventory and distributors that are replenishing stock are also contributing to improve Gartner's mid-term forecasts.

The cellular phone handset application continues to prop up the semiconductor industry, driving above-average device market growth for memories, digital signal processor-based ICs and complementary metal-oxide semiconductor (CMOS) image sensors. Strong growth is also expected in the liquid crystal display (LCD) driver market and in application-specific devices for consumer electronics.

Additional information is available in the Gartner Dataquest report 2Q03 Semiconductor Forecast Update: Outlook Unchanged, which can be purchased from Gartner's Web site. ®

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