SAN JOSE, Calif. – November 5, 2003– The Semiconductor Industry Association (SIA) today released its annual forecast for 2003-2006, highlighting a strong growth forecast for 2004. The association is expecting global sales of semiconductors in 2003 to increase by 15.8 percent to $163 billion and it projects 2004 revenues to increase by 19.4 percent to $194.6 billion.
“We are on an accelerated growth path and this is great news”, said John Daane, chairman, president and CEO of Altera Corporation, who presented the fall forecast at the SIA’s 26th Annual Forecast and Award Dinner. “Growth will be broad based across all markets.”
Addressing approximately 800 Silicon Valley executives, press and analysts at the Fairmont Hotel in San Jose, Daane offered further insight into the state of the industry today. “We are facing an inflection point in our industry where chip development costs are rapidly increasing with each new process node,” he stated. “We believe that this is going to result in some fundamental changes in our industry.”
Daane explained further, “Now, more than ever, semiconductor manufacturers are forced to closely evaluate the return on investment of each chip produced. New opportunities lie in programmable architectures such as microprocessors, microcontrollers, DSPs and programmable logic, which can be leveraged across many customers and many markets.” Daane stressed, “Cost and flexibility will be the keywords going forward.”
The SIA forecast includes detail on regional semiconductor markets and products. Among the key highlights:
Americas Market: The Americas will grow 1.9 percent to $31.9 billion in 2003, and then grow 17.7 percent to $37.5 billion in 2004. In 2005, we forecast the market to remain nearly flat with growth of 1.7 percent to $38.2 billion, and then resume growth of 6.4 percent in 2006 to $40.6 billion.
European Market: This region will grow 17.3 percent in 2003 to $32.6 billion, 14.7 percent to $37.4 billion in 2004, 5.9 percent to $39.6 billion in 2005, and 6.3 percent to $42.0 billion in 2006.
Japanese Market: The Japanese market will grow 24.3 percent to $37.9 billion in 2003, increase 17.9 percent to $44.7 billion in 2004, 4.6 percent to $46.8 billion in 2005, and 4.4 percent in 2006 to $48.9 billion.
Asia Pacific Market: Of all the semiconductor regions, this region continues to experience the strongest growth. It is forecast to grow 18.6 percent to $60.6 billion in 2003, 23.4 percent to $75.0 billion in 2004, and 8.2 percent to $81.5 billion in 2005. In 2006, Asia Pacific will report growth of 8.2 percent to $88.2 billion.
Semiconductor Product Categories:Total Semiconductors: The total semiconductor market is expected to increase 15.8 percent to $163.0 billion in 2003. The SIA forecasts growth of 19.4 percent to $194.6 billion in 2004, 5.8 percent to $206.0 billion in 2005, and 6.6 percent to $219.6 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 5.9 percent to $13.1 billion in 2003. Discretes are then forecast to grow 12.7 percent to $14.7 billion in 2004, 9.3 percent to $16.1 billion in 2005, and 2.4 percent to $16.5 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 34.7 percent to $9.1 billion in sales, grow 19.2 percent to $10.9 billion in 2004, 5.0 percent to $11.5 billion in 2005, and 10.0 percent to $12.6 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 10.0 percent to $26.3 billion in 2003, 15.4 percent to $30.4 billion in 2004, 11.5 percent to $33.9 billion in 2005, and 2.1 percent to $34.6 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 15.0 percent to $36.0 billion, increase 15.6 percent in 2004 to $41.6 billion, 11.4 percent to $46.3 billion in 2005 and 2.0 percent to $47.3 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 13.9 percent to $43.4 billion, 18.2 percent to $51.2 billion in 2004, 9.0 percent to $55.8 billion in 2005, and 5.4 percent to $58.9 billion in 2006.
Microprocessors: In 2003, microprocessors will increase 14.4 percent to $27.3 billion and then are forecast to grow 18.3 percent to $32.3 billion in 2004, 7.6 percent to $34.7 billion in 2005, and 6.0 percent to $36.8 billion in 2006.
Microcontrollers: The global microcontroller market, driven by consumer and automotive applications, will increase 6.4 percent to $9.9 billion in 2003, and then grow 12.1 percent to $11.2 billion in 2004, 6.0 percent to $11.8 billion in 2005, and 2.0 percent to $12.1 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 25.9 percent to $6.1 billion in 2003, 27.1 percent in 2004 to $7.8 billion, 19.3 percent to $9.3 billion in 2005, and 7.6 percent to $10.0 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 16.6 percent to $31.5 billion and 32.3 percent to $41.7 billion in 2004. In 2005, this market is expected to incur a cyclical downturn with a decrease of 10.1 percent to $37.5 billion in sales. By 2006, the loss will be made up with growth resuming to 18.2 percent to $44.3 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 7.9 percent to $16.5 billion in 2003 and 35.0 percent to $22.2 billion in 2004. In 2005, DRAMs are expected to decrease 20.0 percent to $17.8 billion. In 2006, this market will rebound 30.0 percent to $23.1 billion in sales.
Flash: Flash products can be found in communications and digital photography applications. In 2003, this market is expected to grow 42.7 percent to $11.1 billion, grow an additional 36.4 percent to $15.1 billion in 2004, and slow its growth to 2.0 percent to $15.4 billion in 2005. In 2006, Flash is expected to increase 9.0 percent to $16.8 billion in sales.
About the SIAThe SIA is the leading voice for the semiconductor industry and has represented U.S semiconductor companies since 1977 and SIA member companies comprise more than 85% of the U.S. semiconductor industry. Collectively, the chip industry employs a domestic workforce of 255,000 people. More information about the SIA can be found at www.sia-online.org.
SIA CONTACTMolly Tuttle