2002-2005 FORECAST: SIA Projects Double-Digit Growth for Global Semiconductor Sales
2002-11-15

November, 2002

2002-2005 FORECAST: SIA Projects Double-Digit Growth for Global Semiconductor Sales

-19.8% Growth Rate Fuels Industry Advance in 2003 - -$200 Billion Chip Industry Forecast by 2004--


SAN JOSE, Calif. – November 6, 2002– The Semiconductor Industry Association (SIA) today released its 2002-2005 annual forecast, projecting an industry recovery with double-digit growth over the next two years. Worldwide sales of semiconductors are expected to increase by 1.8 percent in 2002, by 19.8 percent in 2003, and by 21.7 percent in 2004.

AMD Chairman W. J. (“Jerry”) Sanders III presented the new forecast at the SIA’s 25th Annual Forecast and Award Dinner held in San Jose, California. “The long-awaited recovery is under way,” said Sanders. “We believe the next several years will see steady growth following the industry’s steepest-ever decline in 2001.” Sanders noted that worldwide semiconductor sales are now projected to surpass the peak revenues of 2000 in 2004.

“It is now clear that 2000 was a bubble that distorted the industry’s compound annual growth rate, pushing it above 16 percent,” said Sanders. “We believe that compound annual growth rates in the range of 8 to 10 percent will be the norm going forward over the longer term. This will represent a sea change for our industry. We can no longer count on the proverbial rising tide that lifts all boats. Nevertheless, a huge industry with compound annual growth averaging 8 to 10 percent will continue to offer opportunities for significant growth for companies that consistently deliver desirable products for their target customers,” he added.

The SIA forecast includes detail on regional semiconductor markets and products such as:

World Markets: “Reflecting the rapid shift of contract manufacturing operations to the Asia-Pacific region – primarily China and Taiwan –semiconductor consumption in this region grew by 30 percent,” noted Sanders. “In 2001, the Asia-Pacific region accounted for 29 percent of worldwide semiconductor consumption. In 2002, we project that this number will rise to 37 percent – the largest one-year shift in consumption patterns in history.”

Americas Market: The Americas will decline 12 percent to $31 billion in 2002, and then grow 14 percent to $36 billion in 2003, 22 percent to $43 billion in 2004, and then decline 4.6 percent in 2005 to $41 billion.

European Market: This region will decline 9.0 percent in 2002 to $27 billion, and then grow 18 percent to $32 billion in 2003, 19 percent to $39 billion in 2004, and decrease 1.0 percent to $38 billion in 2005.

Japanese Market: The Japanese market will decrease 7.5 percent to $31 billion in 2002, increase 22 percent to $37 billion in 2003, 18 percent to $44 billion in 2004, and then remain nearly flat, decreasing at 1.3 percent in 2005 to $43 billion.

Asia Pacific Market: Of all the semiconductor regions, this region shall experience the strongest growth in 2002 with sales increasing 30 percent to $52 billion, and should continue growing in 2003 and 2004 24 percent to $64 billion and 25 percent to $80 billion, respectively. Like the other markets in 2005, Asia Pacific will experience a slowdown, reporting growth of 3.0 percent to $83 billion.

Semiconductor Product Categories:

Total Semiconductors: The total semiconductor market is expected to experience a slight increase in sales in 2002 of 1.8 percent to $141 billion. In 2003, the SIA forecasts growth of 19.8 percent to $169 billion, 22 percent to $206 billion in 2004, and then remain flat at $206 billion in 2005.

Discrete Components: Discrete components include power transistors and radio frequency (RF) solutions that are found in wireless consumer products. This segment is forecast to remain essentially flat in 2002 with 2.2 percent growth to $12 billion. Discretes are then forecast to grow 11 percent to $14 billion in 2003, 16 percent to $16 billion in 2004, and 1.3 percent to $16 billion in 2005.

Optoelectronics: The optoelectronics market includes laser devices, image sensors, and products that are frequently used in communication applications. In 2002, this market is expected to decline 7.0 percent to $7 billion in sales, but then grow 18 percent to $8.1 billion in 2003, 17 percent to $9.5 billion in 2004, and 10 percent to $10 billion in 2005.

Analog: Consumer and automotive application-specific analog products play an important role in this sector. The largest end-use driver of analog includes the upgraded telecommunications networks for Internet service and digital telecom technologies. Analog is expected to grow 3.0 percent to $24 billion in 2002, 19 percent to $28 billion in 2003, 22 percent to $35 billion in 2004, and 5.2 percent to $36 billion by 2005.

MOS Logic: The global logic market includes standard logic, standard cell, field programmable logic devices (FPLD), and a broad variety of application-specific products. In 2002, MOS Logic is expected to decline 3.1 percent to $32 billion, however, increase 16 percent in 2003 to $37 billion, 19 percent to $44 billion in 2004 and 7.8 percent to $47 billion in 2005.

MOS Micro Devices: This broad product category includes microprocessors, microcontrollers and digital signal processors. In 2002, this product sector is forecast to grow 2.8 percent to $38 billion, 18 percent to $45 billion in 2003, 16 percent to $52 billion in 2004, and 5.9 percent to $55 billion in 2005.

Microprocessors: Microprocessors will remain nearly flat in 2002 with 1.9 percent growth to $24 billion and then forecast to grow 12 percent to $27 billion in 2003, 14 percent to $30 billion in 2004, and 4.6 percent to $32 billion in 2005.

Microcontrollers: The global microcontroller market, driven by consumer and automotive applications, will experience a slight decline in 2002 before it sees growth in 2003. It is forecast that this sector will decrease 0.2 percent to $9.6 billion in 2002, and then grow 25 percent to $12 billion in 2003, 12 percent to $13 billion in 2004, and 5.0 percent to $14 billion by 2005.

Digital Signal Processors: DSPs can found in wired and wireless communications applications. This market is forecast to increase in sales 15 percent to $4.9 billion in 2002, 33 percent in 2003 to $6.5 billion, 29 percent to $8.4 billion in 2004, and 12 percent to $9.4 billion in 2005.

Application Specific: Application Specific Standard Products (ASSP) include consumer, computer and peripheral, communications, automotive, and industrial and other markets. After declining over 27 percent in 2001, the ASSP market is poised for growth. In 2002, ASSP should grow 5.7 percent to 15 billion, and then increase 18 percent to $17 billion in 2003 and 21 percent to $21 billion in 2004. 2005 is expected to have slow growth of 5.4 percent to $22 billion in sales.

MOS Memory: The MOS Memory market, which includes DRAMs, Flash, SRAMs, and EPROMs, continues in its historical volatile patterns. Sales in this product sector will be led by the DRAM market, followed by Flash. In 2002, the MOS Memory market is forecast to grow 8.2 percent to $27 billion, 33 percent to $36 billion in 2003, and 35 percent to $48 billion in 2004. By 2005, this market is expected to incur a cyclical downturn with a decrease of 21 percent, sales down to $38 billion.

DRAM: No one segment more clearly demonstrates the cyclical nature of the global semiconductor market than DRAMs, but DRAMs, which were once used almost entirely in computers, are now being found in a broad number of consumer and communication applications. The DRAM market is expected to grow 35 percent to $15 billion in 2002, 35 percent to $20 billion in 2003, and 43 percent to $29 billion in 2004. In 2005, DRAMs are forecast to decrease 29 percent to $21 billion in sales.

Flash: Flash, like other memory products incurs high volatility. Flash products can be found in communications and digital photography applications. In 2002, this market is expected to remain flat at 0.7 percent to $7.7 billion, grow 39 percent to $11 billion in 2003, and 28 percent to $14 billion in 2004. In 2005, however, Flash is expected to decline 9.1 percent to $12 billion in sales.


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