PHOENIX — Citing what it called a state of "Iraqnophobia" in the worldwide economy, Semico Research Corp. here has lowered its 2003 chip forecast for the second time in recent months.
Originally, Semico forecasted 30 percent growth for the worldwide semiconductor industry in 2003 over 2002, but then lowered its projections to 25 percent (see Nov. 6, 2002 story ). Now, the Phoenix-based market research house has reduced the forecast to 23 percent, due to lingering uncertainties in the market.
On Monday, Dataquest Inc. also downgraded its estimate for 2003 semiconductor market growth to 8.9 percent, which would see the worldwide chip market hitting $167 billion in value in 2003, up from $153.4 billion in 2002, according to the latest quarterly forecast estimates from the market research firm.
"The state of the economy can best be described as 'Iraqnophobia,' not to be confused with arachnophobia, the fear of spiders," said Jim Feldhan, president of Semico, in a statement.
"'Iraqnophobia' is the fear/uncertainty of a war with Iraq. This fear includes uncertainty about oil supply, length of war, use of chemical weapons and increased terrorist attacks," he said.
Semico still sees the economy is poised for a strong recovery in 2003. It expects first quarter gross domestic product (GDP) will be up 3-4 percent from fourth quarter of 2002.
"Semico sees pent up demand in the IT sector for long overdue hardware, software and infrastructure upgrades," Feldhan said. "However, with the specter of war in Iraq looming on the horizon, corporate leaders continue to delay spending decisions and investments, adversely affecting a recovery in the semiconductor sector."
But the semiconductor industry continues to struggle with soft pricing and weak demand. Semico expects chip prices will continue to be weak in the first quarter, and will firm up throughout 2003. One key driver for this recovery will be growing demand in the Asia-Pacific market, particularly China.
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