Chip market to continue its slump in 1999

Chip market to continue its slump in 1999

Just a week after the US Semiconductor Industry Association released indicators that the global chip market is on the rebound (ARN November 18, 1998), that stance has apparently been rebutted by new research from International Data Corporation (IDC).

The semiconductor market will remain in a slump until the latter half of 1999, when semiconductor prices and capacity will begin to stabilise, the recent IDC study found.

The semiconductor market is expected to generate $US124.6 billion in revenue this year, a 9.2 per cent dip attributed to sluggish PC demand in the first half and economic and political unrest in Asia and Japan, IDC said.

Growth rate halved

IDC revised its previous 16.5 per cent growth rate in semiconductor sales to 8 per cent for 1999. The growth rate will begin to stabilise through major company cutbacks in capacity and capital spending, combined with investments in equipment needed for year 2000 problems, IDC said.

The semiconductor market should return to double-digit growth by 2000, and generate $US232 billion in sales by 2003, IDC predicted.

All market segments, including microprocessors, were weaker this year, IDC said. The microprocessor market is expected to generate revenues of $US23.9 billion in 1998, a 1.7 per cent growth rate. In 1999, however, this market segment is forecast to grow 13.7 per cent , to $27.1 billion.

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