FRAMINGHAM, Mass.--Fueled by cellular phones, PCs and other products in the marketplace, the semiconductor business is expected to grow 18 percent in 2004 over 2003, according to International Data Corp. (IDC).
From 2003 to 2008, IDC predicts that the semiconductor market will grow at a compound annual growth rate of 12.5 percent, rising from $160 billion in revenue this year to $282 billion in 2008.
Indeed, the market is back on track after a long slump. "Stronger than expected mobile phone and PC shipments have stabilized average selling prices (ASPs) for chips and increased capacity utilization rates among suppliers," according to the Framingham-based market research house.
In total, mobile phone shipments, including PHS/PAS, are expected to surpass 530 million units this year, while PC shipments grow by 11 percent surpassing 152 million units. IDC expects double-digit growth in units for both markets in 2004.
Another driver is China, which will continue to drive mobile phone and PC semiconductor growth. "China has become a fertile ground for disruptive innovation as its low-cost suppliers naturally aspire to move up market," said Mario Morales, vice president of IDC's semiconductor research at IDC, in a statement.
"IDC expects these emerging Chinese semiconductor companies will play a key role in shaking up the competitive ranks among original equipment manufacturers (OEMs), original design manufacturers (ODMs), and semiconductor suppliers over the next five years," he said.
"Mainland Chinese semiconductor demand currently represents over one quarter of the $60 billion total for Asia/Pacific and will account for almost half of the entire region by the end of our forecast period," he added.
In 2003, Japan will surpass the Americas as the second largest consuming region in the world. Japan's growth is led by export growth, while domestic demand remains muted.
Asia/Pacific region becomes the dominant region for PC and mobile phone demand and production with China accounting for the bulk of this region's growth.