|
23rd April 2004 - After its disastrous 32% decline
in 2001 and a lackluster 2002, the worldwide semiconductor
market turned up in 2003 and grew by 18.3%. In-Stat/MDR,
the high-tech market research firm who's 2003
forecast was a mere .2% higher than actual, now
projects that growth will be an even stronger
29% in 2004, bringing total revenue to $214.7
billion and vying with 2000 for record-high annual
revenue.
However, although we do not expect a replay of
2001 anytime soon, the strength of the current
recovery should not be interpreted as a return
to the good old days.
|
|
Fundamental changes are taking place in both the demand
and supply aspects of the semiconductor market that
will cause the next decade to be significantly different
from the last. Specifically, In-Stat/MDR notes, that
on the demand side, there lacks the existence of a single
new "killer app" on the horizon to drive future
market growth as PCs and mobile phones did in the 1990s.
And, the wide variety of lower volume products that
have emerged are subject to standardization and/or extreme
competition, both of which tend to suppress ASPs and
limit revenue growth. On the supply side of the equation,
commoditization of the CMOS process is holding prices
down. The growth of the foundry industry, particularly
in China, is expected to keep competition high, and
therefore wafer prices low, in the long term. On the
design side, the shift of design work to low cost locations
will ease growing design costs, while the growth of
standards based designs will limit intellectual property
(IP) costs.
In-Stat/MDR's newest semiconductor market forecast
also reports the following:
- Although semiconductor prices are expected to rise
moderately in the short term as capacity tightens,
over the long term, In-Stat/MDR expects that price
erosion will cause revenue to grow somewhat slower
than unit shipments.
- While 2005 will also see some growth, 2006 will
experience a downturn. Growth is expected to resume
in 2007 and 2008 as unit growth continues and ASP
remains relatively flat, at a level lower than any
recent year except 2002.
This Market Alert is drawn from the In-Stat/MDR report,
"Semiconductor
Market Outlook", which draws on a variety of
In-Stat/MDR reports to look at trends in a cross section
of end product markets. The report also examines recent
trends within the semiconductor industry and ends with
a top level 5 year forecast.
Back
to News Reports
|
