MOUNTAIN VIEW, Calif.--Global sales will top $10 billion this year for the first time for disk drives that offer removable media. More than 260 million of these memories from 61 vendors will be shipped, including CD-ROM and DVD-ROM drives, CD/DVD writable versions, flexible disk models, card and cartridge units, according to a new report from Disk/Trend Inc.
Not all categories are growing, however. Shipments of CD-ROM drives will drop from $4.29 billion last year to $803 million in 2002, while coming up fast to take its place as leader will be DVD-ROM models, which will shoot up from $650 million in 1998 to $4.24 billion in 2002, Disk/Trend predicts.
While there are many writable optical disk drives being sold now, the type enjoying the fastest growth is the two-year-old CD-RW, which can use either write-once or rewritable disks. By 2002, however, DVD rewritable formats also should be experiencing significant growth, Disk/Trend says, with new high-capacity units being offered that use both optical and magnetic recording technologies. Total sales of CD/DVD writable drives will grow from $1.3 billion 1998 to $3.34 billion in 2002, according to the market research firm.
Many new high-capacity floppy drives were announced in recent years, but the only units now being produced in quantity are Iomega's Zip and Clik! models, and the SuperDisk from several companies, Disk/Trend says. In spite of the confusion on interchange stands, it estimates that 12.7 million of these drives were shipped in 1998, growing to 34.3 million in 2002.
Despite continuing predictions of its imminent death, the low-capacity 1.44 megabyte floppy drive is still shipping in large quantities, the market research firm noted. Shipments totaled $1.62 billion last year, and the outlook is for a steady decline to $1.15 billion in 2002.
Digital chip market for
broadcast gear will soar
OYSTER BAY, N.Y.--Here's one digital chip market that will grow like a weed over the next six years. The global market for digital broadcast systems and equipment will shoot up at a compound annual growth rate of 43% between 1999 and 2005, according to Allied Business Intelligence Inc. (ABI) here.
The worldwide penetration for all digital broadcasting services by the end of this year will be only 2.5% of all households, ABI says. But by 2005, this penetration will rise to 21%, it says. Because of Direct Broadcast Satellites (DBS), household penetration in the U.S. already has hit 16% and will increase to 60% by 2005, the market researcher says.
There are now more than 1.4 billion TV sets in the world, including 250 million in the U.S., but the transition to digital TV is going to take some time due to a lack of content, cost, signal receptions, and compatibility, the research outfit says. By 2005, it predicts, 15% of all new TV set sales will be digital models.
DRAM 'Fubar' knocks 4 points
off European semiconductor growth
SEVENOAKS, England -- Europe has its own name for it--DRAM Fubar--but it's hitting the European chip market as hard as it is the global semiconductor business. "Fubar" is a term coined by military strategists that translates roughly into "fouled up beyond all reason," comments Malcolm Penn, CEO of Future Horizons, a chip analyst firm here.
The renewed DRAM price war between Micron Technology Inc. and the South Korean DRAM makers has caused a 50% drop in DRAM prices in Europe--from $8 to the $4 area for a 64-megabit DRAM, he says. "At these prices, nobody is profitable, and the balance sheets show it," Penn says. It's all about "who's going to be No. 1 in worldwide DRAM production, whatever the cost."
The DRAM market won't recover until the Korean-U.S. price war ceases or demand finally catches up with supply, Penn says. As a result, DRAMs will limit this year's European chip market to a 11% increase, he forecasts, taking as much as a 3-to-4 percentage points off overall chip market growth.
But DRAMs aside, the rest of the European chip market is performing well, he notes. All indicators, Penn says, confirm that the chip recovery "is definitely in place." Lead times are starting to push out, he adds.
Like others, Penn is looking ahead to a wafer fab capacity shortage in the 2000-2001 period. This will happen because of the 30% cutback in new plant and equipment last year. There's no way to avoid a shortage now, he says, other than a major slowdown in market demand.
Market share of Top 10
distributors jumps to 81%
ATLANTA -- A new analysis by the National Electronic Distributors Association shows that the concentration of business by electronic distributors in North America is accelerating.
Consolidation has made a dramatic effect on marketshare, according to the trade group. Over the past four years, the top 10 component distributors increased their share of this market by 23.4%, or from 65.4% in 1995 to 80.7% in 1998, NEDA says.
The biggest loss of share was shown by those smaller distributors that are not in the top-100 companies. Their share of the pie dropped from 8.8% in 1995 to just 3.6% in 1998.
Those distributors that were ranked 11th through 25 showed a decline in market share from 14.1% in 1995 to just 8.7% last year, NEDA says.
Total worldwide sales by North American distributors grew 9.6% last year to $39.1 billion from $37.2 billion.
In-Stat bets on Rambus to win
SCOTTSDALE, Ariz.--In-Stat is still betting on Intel Corp.'s muscle to make a winner out of the Rambus DRAM, despite what it calls the "unprecedented controversy among PC OEMs, their semiconductor supply base, and related industries."
Intel's decision to base its technology roadmap on the RDRAM means that the technology will capture the leading DRAM market share over the next several years, the market research firm predicts.
"Contrary to what other firms are saying, we believe it is not a question of whether Rambus will be successful, but rather when," declares Steve Cullen, an In-Stat analyst.
In-Stat believes that RDRAM ultimately will capture 60% of the PC market due to Intel's marketing and distribution muscle. But other scenarios could mean that RDRAM's PC market share could run as low as 33% or as high as 73%, the market researcher says. That's certainly a wide range of forecasts.
Another factor favoring Rambus, In-Stat says, is its "significant advantage" in bandwidth per pin which helps to satisfy microprocessors' insatiable appetite for data.
The research group is going all out for Rambus. It figures that the technology will be "a major factor in differentiating first-tier DRAM suppliers from the rest of the pack. DRAM suppliers that do not adopt Rambus," it predicts, "will see shrinking market share for PC DRAM and suffer overall dropping unit volumes."
PC unit sales soar
in second quarter
SAN JOSE--The semiconductor business is getting a big boost from a surging global personal computer market. All regions showed strong growth in PC shipments during the second quarter, according to a preliminary report from Dataquest, a Gartner Group research unit here.
Sales shot up 26.4% in the quarter over last year because of lower system prices, the general economic recovery, and the Internet, the market research firm says.
Demand in Asia/Pacific was driven by a return in business confidence, Dataquest says, while the UK and France performed well across the professional and consumer segments to lead Europe. The Latin America market also did well, the research firm notes, with Mexico exhibiting continued strength and the Brazilian market showing signs of recovery.
All the top-tier vendors grew more than 30% in worldwide shipments over the second quarter last year, Dataquest reports, with Dell and IBM showing the strongest year-over-year global growth with increases of 50% and 47% respectively. The leaders, all five from the U.S., increased their global market shares over the second quarter of 1998.