The highly cyclical and volatile nature of the global semiconductor market will be evident once again this year as chip sales, which grew 37% in 2000 to $204bn, will decline 13.5% this year to $177bn.
That is the latest prediction from the World Semiconductor Trade Statistics (WSTS) group, part of the Semiconductor Industry Association and representing 70 of the largest chip makers worldwide.
The projection is more conservative than that of other analysts. Dataquest's latest figures suggest a 17% fall this year.
But just six months ago, WSTS forecast a 20% growth rate for chip sales in 2001. DRAM memory sales will suffer a big decline, falling 36% to $18.5bn.
Key market segments, such as PCs and cellphones, have been leading the chip market decline. The WSTS says it expects a modest 5 to 7% growth rate recovery in those sectors in the second half of this year.
Osamu Yamashiro, head of WSTS Japan, said: "Demand for semiconductors that are used in Internet infrastructure, which was a growth driver last year, may remain sluggish in all of 2001."