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Chip biz body cuts 2003 growth forecast

Even new figure may be too high

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The World Semiconductor Trade Statistics (WSTS) organisation has scaled back the amount by which its expects the global chip business to grow this year.

Last October, it predicted that the industry would grow by 16.6 per cent during 2003. Now it has cut that forecast to just 11.5 per cent.

That represents a shortfall of $7.2 billion, a bit less than one month's worth of chip sales, based on Semiconductor Industry Association (SIA) figures.

According to a Reuters report, one unnamed London analyst "at a major investment bank" believes even the new WSTS forecast is too high, and that we should expect to see only single-figure growth this year.

The SIA's numbers for the first four months of the year show year-on-year growth is slowing each month, from 22 per cent in January to 9.7 per cent in April. Sequential growth during that period has been effectively flat. If those trends continue, 2003 will indeed show low, single-figure growth over 2002.

Meanwhile, the WSTS also reduced its growth forecast for 2004, from 19.2 per cent to 18.4 per cent, but raised its prediction for 2005 from 2.5 per cent to 7.9 per cent.

For 2003, the big growth area will be Japan, the organisation said, with sales rising 17.8 per cent on the back of increased consumer electronics purchases. The European chip market will grow 14.1 per cent, while Asia-Pacific will experience 13.3 per cent growth. The US will remain flat, rising by perhaps 0.1 per cent. ®

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