SIA Sees Semiconductor Growth

SAN JOSE, Calif. -- The Semiconductor Industry Association (SIA) today released its 2003-2006 midyear forecast, projecting 16.8 percent growth for 2004 and a compound annual growth rate (CAGR) of 9.8 percent over the forecast period. Annually, worldwide sales of semiconductors are expected to increase 10.1 percent in 2003, 5.8 percent in 2005, and 7.0 percent in 2006. Industry sales will grow from $141 billion in 2002 to $205 billion in 2006.

“In 2004, the growth is led by a strong increase in memory, including a 43% jump in DRAM and a 25% increase in Flash, and supported by double digit growth in other product sectors” Semiconductor Industry Association President George Scalise said. “The recovery is broad based across computer, consumer and communications applications as they all continue to be drivers for the industry. The forecast contemplates a return to higher IT spending levels and the emergence of multi-function products such as smart phones.”

“The SIA forecast reflects the new realities of the semiconductor industry of an 8-10 percent compound annual growth rate as stated in our November 2002 forecast,” Scalise added.

The SIA forecast includes detail on regional semiconductor markets and products. Among the key highlights:

World Markets: “Semiconductor consumption is forecast to continue a migration from the Americas to Asia Pacific, reflecting the outsourcing of electronic equipment manufacturing, including component sourcing and design services, to the region,” noted Scalise.

Americas Market: The Americas will decline 2.1 percent to $30.6 billion in 2003, and then grow 15.7 percent to $35.4 billion in 2004. In 2005, we forecast the market to remain nearly flat with a slight decline of .09 percent to $35.1 billion, and then resume growth of 8.8 percent in 2006 to $38.24 billion.

European Market: This region will grow 11.8 percent in 2003 to $31.1 billion, 13.6 percent to $35.3 billion in 2004, 4.7 percent to $36.9 billion in 2005, and 6.1 percent to $39.2 billion in 2006.

Japanese Market: The Japanese market will grow 17.5 percent to $35.8 billion in 2003, increase 14.1 percent to $41.9 billion in 2004, 6.5 percent to $43.5 billion in 2005, and 4.9 percent in 2006 to $45.6 billion.

Asia Pacific Market: Of all the semiconductor regions, this region shall experience the strongest growth in the next few years. It is forecast to grow 12.1 percent to $57.3 billion in 2003, 20.9 percent to $69.3 billion in 2004, and 9.4 percent to $75.8 billion in 2005. In 2006, Asia Pacific will report growth of 7.9 percent to $81.8 billion.

Semiconductor Product Categories:

Total Semiconductors: The total semiconductor market is expected to increase 10.1 percent to $154.9 billion in 2003. The SIA forecasts growth of 16.8 percent to $180.9 billion in 2004, 5.8 percent to $191.5 billion in 2005, and 7.0 percent to $204.9 billion in 2006.

Discrete Components: Discrete components include power transistors and radio frequency (RF) solutions that are found in wireless consumer products. This segment is forecast to grow 7.3 percent to $13.2 billion in 2003. Discretes are then forecast to grow 12.1 percent to $14.9 billion in 2004, 9.4 percent to $16.3 billion in 2005, and 3.3 percent to $16.8 billion in 2006.

Optoelectronics: The optoelectronics market includes laser devices, image sensors, and products that are frequently used in communication applications. In 2003, this market is expected to increase 22 percent to $8.3 billion in sales, grow 15.0 percent to $9.5 billion in 2004, 11.7 percent to $10.6 billion in 2005, and 5.6 percent to $11.2 billion in 2006.

Analog: Consumer and automotive application-specific analog products play an important role in this sector. The largest end-use driver of analog includes the upgraded telecommunications networks for Internet service and digital telecom technologies. Analog is expected to grow 7.9 percent to $25.8 billion in 2003, 14.0 percent to $29.4 billion in 2004, 13.5 percent to $33.4 billion in 2005, and 5.0 percent to $35.1 billion by 2006.

MOS Logic: The global logic market includes standard logic, standard cell, field programmable logic devices (FPLD), and a broad variety of application-specific products. In 2003, MOS Logic is expected to grow 9.6 percent to $34.2 billion, increase 12.6 percent in 2004 to $38.6 billion, 11.7 percent to $43.1 billion in 2005 and 5.0 percent to $45.2 billion in 2006.

MOS Micro Devices: This broad product category includes microprocessors, microcontrollers and digital signal processors. In 2003, this product sector is forecast to grow 11.0 percent to $42.2 billion, 13.2 percent to $47.9 billion in 2004, 8.3 percent to $51.8 billion in 2005, and 7.7 percent to $55.8 billion in 2006.

Microprocessors: In 2003, microprocessors will increase 8.1 percent to $25.8 billion and then are forecast to grow 11.1 percent to $28.6 billion in 2004, 7.0 percent to $30.7 billion in 2005, and 4.0 percent to $31.9 billion in 2006.

Microcontrollers: The global microcontroller market, driven by consumer and automotive applications, will increase 9.9 percent to $10.3 billion in 2003, and then grow 14.0 percent to $11.7 billion in 2004, 3.2 percent to $12.1 billion in 2005, and 18.5 percent to $14.3 billion by 2006.

Digital Signal Processors: DSPs can found in wired and wireless communications applications, along with consumer, computer and automotive. This market is forecast to rise 27.7 percent to $6.2 billion in 2003, 20.8 percent in 2004 to $7.5 billion, 21.0 percent to $9.1 billion in 2005, and 6.0 percent to $9.6 billion in 2006.

MOS Memory: The MOS Memory market, which includes DRAMs, Flash, SRAMs, and EPROMs, continues in its historical volatile patterns. Sales in this product sector will be led by the DRAM market, followed by Flash. In 2003, the MOS Memory market is forecast to grow 8.5 percent to $29.3 billion and 32.0 percent to $38.7 billion in 2004. In 2005, this market is expected to incur a cyclical downturn with a decrease of 11.9 percent to $34.1 billion in sales. By 2006, the loss will be made up with growth resuming to 12.3 percent to $38.3 billion.

DRAM: No one segment more clearly demonstrates the cyclical nature of the global semiconductor market than DRAMs. While DRAMs were once used almost entirely in computers, they are now found in a broad number of consumer and communication applications. The DRAM market is expected to grow 2.9 percent to $15.7 billion in 2003 and 43 percent to $22.5 billion in 2004. In 2005, DRAMs are expected to decrease 26.8 percent to $16.4 billion. In 2006, this market will rebound 29.6 percent to $21.3 billion in sales.

Flash: Flash products can be found in communications and digital photography applications. In 2003, this market is expected to grow 25.0 percent to $9.7 billion, grow an additional 25.0 percent to $12.1 billion in 2004, and another 11.0 percent to $13.5 billion in 2005. In 2006, however, Flash is expected to decline 5.0 percent to $12.8 billion in sales due to the cyclical nature of this sector.

Semiconductor Industry Association (SIA)