SAN DIEGO -- Despite a slowdown in the PC, network equipment, and wireless handset markets in recent weeks, the semiconductor market will continue to grow at a double-digit rate for the remainder of 2000 and the next couple of years before hitting a downturn in 2003, according to forecasts from Dataquest Inc.
But the San Jose-based market research firm also predicted that the semiconductor vendors themselves will face an assortment of problems, including allocation issues in the short term in addition to the downturn in 2003 and slow growth in 2004.
"We will see allocation in the semiconductor industry in 2001 and 2002," said Jim Handy, who tracks the semiconductor market for Dataquest, in a presentation at the "Dataquest Semiconductors 2000" conference here today. "But we will see overcapacity in 2003 and 2004," he warned at the event.
During his presentation, Handy reiterated Dataquest's previous semiconductor forecast, which was outlined earlier this month. In total, the worldwide semiconductor industry is projected to show an annual compounded growth rate of 13.6% from 1999 to 2004, according to the current Dataquest forecast(see Oct. 9 story).
Worldwide chip sales are expected to grow 37% to $232 billion in 2000 from $169 billion in 1999, followed by an increase of 27% to $295 billion in 2001, according to the Dataquest forecast. In 2002, chip sales will reach $336 billion, a 14% increase, the forecast said.
But in 2003, the chip market will drop back by 4% to $321 billion, followed by a modest increase of 6% to $340 billion in 2004, said Dataquest.