The chip industry has been in the doldrums ever since the collapse of the dotcom market in early 2001, but industry analyst Dataquest is predicting that tide will turn in 2003 with global semiconductor sales rising 12 per cent to $US171.8 billion.
The growth will be driven in part by increased sales of digital cell phones, as businesses and consumers upgrade from second-generation (2G) phones to 2.5G devices, said Dataquest, a unit of Gartner.
Faster semiconductor revenue growth will occur in 2004, when businesses can no longer afford to hold off on upgrading their PCs to newer models, the company said.
Semiconductor companies will experience flat growth in 2002, with projected 2002 revenue of $US153.3 billion, up 0.5 per cent from 2001 revenue of $152.5 billion, Dataquest said. But the industry is making it back from the huge decrease in revenue from the 2000 fiscal year, when semiconductor companies posted $217.4 billion in revenue, according to Dataquest.
Chip manufacturers themselves are not projecting a return to higher production volumes any time soon. Intel has stood by its guidance of flat revenue growth for the fourth quarter, and said it has not seen a recovery in its business. Intel rival AMD is expected to affirm higher revenue guidance for the fourth quarter during its quarterly analyst call, but it will also provide details on a company restructuring, which will include layoffs.