Chip companies are poised to experience a 6% increase in global chip sales next year, according to the Semiconductor Industry Association (SIA).
The research says it will be followed by robust growth rates of 21% in 2003 and 2004. But the European market is likely to experience slower rises.
With $150bn in global sales forecast for 2002, the IC business will finally break the $200bn barrier in 2004 with $218bn in sales.
In September 1996, just before chip sales collapsed, Dataquest had forecast a $230bn chip market as early as 2000. But two devastating recessions have left the industry far behind this target.
Rich Templeton, chief operating officer of Texas Instruments, said: "History shows that through upturns and downturns, this industry has always grown over the long-term and, while the exact timing and shape of the coming recovery is hard to predict, recovery is certain."
The SIA says future growth will be driven by PC sales, wireless communications devices and consumer products such as MP3 digital music players.
The SIA also expects European sales to suffer a 29% slump this year to $30bn, followed by a minimal rise in 2002 to $31bn, a 20% rise in 2003 to $37bn and another 20% rise to $44bn in 2004.