Small growth in '02 chip revenue, but '03 looks better

Worldwide revenue from chips will grow almost 20 percent in 2003, coming off a year that experienced anemic growth in chip sales, the Semiconductor Industry Association (SIA) said in a press release Monday.

Revenue from sales of semiconductors worldwide reached US$140.7 billion in 2002, a 1.3 percent increase from revenue of $138.9 billion in 2001, but still way off the high-water mark of $204.3 billion in chip sales in 2000.

The worldwide market will reach $169.3 billion in 2003, the SIA predicted, citing the building momentum behind PC and cell phone sales, as well as a prediction of increased IT spending.

A recent poll of chief information officers (CIOs) agreed with the SIA, with a little more than half of the survey respondents saying they are currently replacing their PCs or have plans to do so during 2003.

PC sales accounted for 30 percent of the total number of chips sold worldwide in 2002, according to the SIA. CIOs have been reluctant to upgrade their PCs due to shrinking budgets and the fact that most applications were working just fine on older PCs.

The SIA is hoping momentum from a strong fourth quarter carries over into the new year. PC processors revenue grew 10.1 percent in the fourth quarter, and DRAM (dynamic memory) for PCs grew 7.6 percent in the fourth quarter. Flash memory revenue, an important component of cell phones, grew 13.2 percent in the fourth quarter, the SIA said.

Asia-Pacific accounted for the highest amount of revenue growth in 2002, with a 29 percent jump in revenues from that region and an increasing number of chip production facilities making it the world's largest market for semiconductors with 36 percent market share. Revenue declined 13 percent in the Americas, 8 percent in Japan, and 8 percent in Europe, the SIA said.

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