STAMFORD, Conn. -- Market research firm Gartner Inc., has shaved 0.6% off its growth forecast for the 2003 worldwide semiconductor market, taking its estimate down to 8.3%.
Gartner's move follows a relatively strong first quarter in 2003 bolstered by better-than-expected semiconductor sales in March, but the firm also sees signs of continuing market hesitancy. Gartner forecasts market revenue to total $168 billion in 2003, up from $152 billion in 2002.
In the first quarter of 2003, Gartner's semiconductor research group, formerly known as Dataquest, said the worldwide semiconductor market would grow 8.9% in 2003 (see Feb. 24 story). That was a downgrade from a prediction of 12.1% given out late in 2002 (see Nov. 6, 2002 story).
"With quarterly sequential growth at about negative 3.5% in the first quarter of 2003, but likely to turn mildly positive in the second quarter, it appears that the industry is capable of growing in the high single digits this year," said Richard Gordon, research vice president for Gartner's semiconductor research group, in a statement.
Gordon said that although geopolitical uncertainty had receded with the end of the Iraq war and as the outbreak of severe acute respiratory syndrome (SARS) has come under more control, business confidence appears to have been dented. Indications for the level of demand for semiconductors in the second half of 2003 were hard to find, Gordon said.
Although that lack of business confidence might be stalling the long-awaited corporate PC replacement cycle, consumer confidence remained surprisingly strong. As a result, digital cellular telephone handsets, flat-panel displays and digital video consumer products are expected to have strong growth in 2003, Gartner said.
The cellular phone handset application continues to prop up the semiconductor industry, driving above-average device market growth for memories, digital signal processor-based ICs and complementary metal-oxide semiconductor image sensors. Strong growth is also expected in the liquid-crystal display driver market and in application-specific devices for consumer electronics.