Gartner Says Worldwide Semiconductor Industry Is On Track for 11 Percent Growth in 2003
STAMFORD, CONN., August 18, 2003 — Following a healthy second quarter in 2003 and cautious optimism about the onset of the usual seasonal uptick in demand, the worldwide semiconductor market appears to be continuing its recovery, according to Gartner, Inc. (NYSE: IT and ITB).
The worldwide semiconductor market is forecast to reach $173 billion in 2003, an 11.2 percent increase over 2002. In 2002, worldwide semiconductor revenue totaled $156 billion.
"Noteworthy improvements in market conditions during the last few weeks confirm that the industry is continuing its recovery as expected and is about to enter a more accelerated growth phase. This observation is in line with our long-standing assumption of a three-phase recovery in the market," said Richard Gordon, research vice president for Gartner's semiconductor research group. "While many industry watchers have been revising down their forecasts recently, we have been predicting growth of around 10 percent for 2003 since the fourth quarter of last year. Our forecasting consistency is a testament to our rigorous methodology and comprehensive applications-based forecast database."
Gartner analysts said that in front-end semiconductor manufacturing, silicon demand is increasing, overall wafer fab utilization now exceeds 80 percent and foundry wafer pricing has firmed up. In packaging and assembly, overall utilization rates continue to increase on a monthly basis and leading-edge capacity has become tight as the demand for advanced packaging solutions grows.
In device markets, inventories are back to normal levels, pricing has stabilized, and in some cases, there are shortages of critical components. In application markets, the digital cellular handset market remains robust, demand for digital consumer electronics products has not waned and there are early signs that the corporate PC replacement cycle has begun.
"It is becoming increasingly likely that the long-awaited corporate PC replacement cycle will be characterized by incremental increases in IT spending spread over a more prolonged timeframe than we have seen in the past," Gordon said. "While this trend would underpin a sustained semiconductor recovery, it may act to temper headline annual revenue growth. Excess capacity in the telecommunications sector also remains a concern that could postpone the return and inhibit the level of telecommunications industry capital spending in the medium to long term."
Additional analysis is being presented during the upcoming 3Q03 Semiconductor Forecast Teleconference on August 22, 2003 at 11:00 a.m. - 12:00 p.m. (EDT). Key topics that will be covered range from which devices and applications will determine the worldwide semiconductor forecast to how economic, consumer and broader industry factors are expected to affect semiconductor revenue. For more details, please visit www.gartner.com/teleconferences/asset_47053.jsp.
This forecast is also available to clients of Gartner Dataquest's Semiconductor Forecast Worldwide program. This program provides a comprehensive forecast database, which contains a detailed breakdown of the semiconductor forecast by application and by device. This industry leading electronically delivered publication refreshes semiconductor forecast data for more than 80 applications and 30 device types each quarter. To subscribe to this service, please contact Pia Rieppo at 408-468-8710 or at pia.rieppo@gartner.com.
About Gartner:
Gartner, Inc. is the leading provider of
research and analysis on the global information technology industry. Gartner serves more
than 10,000 clients, including chief information officers and other senior IT executives
in corporations and government agencies, as well as technology companies and the
investment community. The Company focuses on delivering objective, in-depth analysis
and actionable advice to enable clients to make more informed business and technology
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analysts and consultants, in more than 75 locations worldwide. For more information,
visit www.gartner.com.
