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Chip biz hikes annual sales forecast

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The Semiconductor Industry Association (SIA), flushed with positive feelings induced by its latest sales figures has upped its annual market growth forecast.

The organisation now believes 2003's total sales will be 15.8 per cent above 2002's figure of $140.8 billion. That will see the industry garner $163 billion in chip sales this year, up from the $155 billion the SIA's previous prediction anticipated.

The SIA's last forecast called for growth of 10.1 per cent this year. That prediction was made in June on the heels of the Iraq war and the SARS outbreak in the Far East. Until then, the SIA had bullishly anticipated growth of 19.8 per cent. That would have led to 2003 sales of $168.7 billion.

Looking ahead, the SIA now says 2004 sales will total $194.6 billion, an increase of 19.4 per cent over 2003. Growth will slow in 2005, with sales rising just 5.8 per cent to $206 billion. During 2006, sales will rise 6.6 per cent to $219.6 billion.

Microprocessor sales are expected to trail behind the industry's overall growth rates, rising 14.4 per cent to $27.3 billion this year, and then 18.3 per cent to $32.3 billion in 2004, 7.6 per cent to $34.7 billion in 2005, and six per cent to $36.8 billion in 2006.

The highly cyclical DRAM business, by contrast, will see single digit growth this year before exploding once more in 2004. The SIA reckons memory sales will grow just 7.9 per cent in 2003 to $16.5 billion, before 2004's increase of 35 per cent (to $22.2 billion), 2005's rise of 20 per cent (to $17.8 billion) and 2006's jump of 30 per cent (to $23.1 billion).

All the major territories will see growth slow over time, peaking this year or next with big double-figure increases, followed by single-figure growth in 2005 and 2006. The growth star will be Asia-Pacific, the SIA said, with growth rates of 18.6, 23.4, 8.2 and 8.2 per cent through 2003 and the following three years, respectively.

Europe and Japan will peak this year - 17.3 per cent and 24.3 per cent, respectively - before slowing to 6.3 per cent and 4.4 per cent growth in 2006.

The Americas fare less well, with no significant market growth until next year (17.7 per cent) before dipping to 1.7 per cent in 2005 and rising a little to 6.4 per cent in 2006. ®

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