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Dataquest: Chip market to grow 8.9 percent in 2003

Dataquest: Chip market to grow 8.9 percent in 2003

The global semiconductor market will grow by 8.9 per cent to revenue of $US167 billion during 2003, driven higher by an expected increase in corporate IT spending during the second half of the year, according to the most recent estimate from Dataquest, an arm of Gartner.

Global demand for chips slowed down during the last part of 2002 and remained weak, Dataquest said. But an expected upturn in business spending on IT, especially for PCs, during the second half of 2003 would combine with continued strong demand for mobile handsets to lift the market towards the end of this year.

However, just how strong any rebound in corporate IT spending will be remains to be seen.

Ongoing questions about the connection between PC upgrades and improved employee productivity meant that gauging the strength of an increase in corporate spending would be difficult before the third quarter, Dataquest warned.

Looking ahead, Dataquest expected to see pent-up demand and lower investment in semiconductor manufacturing facilities. This would limit the addition of manufacturing capacity and result in higher shipments and continued revenue growth in 2004 and 2005.

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