Gartner: A-P semiconductor sales set for strong growth

The Asia-Pacific region, already the largest geographical area for semiconductor sales, will continue to be the fastest-growing region in 2003, according to research released Thursday by Gartner.

The strong growth reflects a continued shift in electronic equipment production to the region, according to Gartner.

The industry will grow 13.2 percent this year to US$64.9 billion and strong growth will continue through to 2007, when the market will be worth $103.9 billion. Asia-Pacific currently accounts for around one-third of global semiconductor sales, Gartner said.

The China/Hong Kong market is the largest in the region, with sales expected to reach $26.7 billion this year, or 41 percent of the region's semiconductor sales. It will also be one of the fastest-growing markets over the next five years, with CAGR (compound annual growth rate) of 15.9 percent, according to Gartner.

South Korea is the second-largest market at $11.6 billion in 2003, and will grow at 16.3 percent over the next five years. Taiwan is the region's third-biggest market, but its growth will be modest as more Taiwanese electronics equipment manufacturers shift their high volume low-end production to China, according to Gartner.

The two major drivers of semiconductor sales are the PC market and the cell phone handsets market, both of which are expected to pick up in the second half of the year. These will drive significant growth in the Asia-Pacific region, the largest electronic equipment manufacturing base. The growing trend towards outsourcing electronic manufacturing services companies and original design manufacturing has also boosted the Asia-Pacific region

The steady shift of low-end electronics manufacturing to developing countries in the region will see Singapore and Malaysia experience fairly slow growth in their semiconductor industries, Gartner said.

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