Record chip sales? Thank consumers
Staff -- Purchasing, 12/9/2004 2:00:00 AM
After a boom year and nearly 30% growth to record revenues of $214 billion, global semiconductor revenues are expected to be flat in 2005, but still achieve a compound annual growth rate of 11.8% from 2003 to 2007.
Chip sales, projects the Semiconductor Industry Association (SIA), will end 2004, up 28.5% from $166.4 billion in 2003. And, after flat growth in 2005, sales will rise 6.3% in 2006 and 14.2% growth in 2007 when the market is expected to reach $259 billion in sales.
The flat year ahead is due to weakening demand and falling prices for memory-integrated circuits. For example, the DRAM market, which grew from $16.7 billion in 2003 to $26.9 billion in 2004, is expected to decline to $23 billion in 2005. Flash memory will drop slightly from $15.8 billion in 2004 to $15.5 billion in 2005. In 2003, flash revenue was $11.7 billion.
The strong sales growth in 2004 was due in large part to consumer electronics equipment, says SIA spokesman, Jen-Hsun Huang, who is also president and CEO of NVIDIA. "More than 50% of the $214 billion in semiconductors sold in 2004 will go into products purchased by consumers rather than corporate IT departments," says Huang. "This [ratio] will continue to grow in the years ahead as consumers all over the world are captivated by the richness and portability of digital media."
That's reflected in the strong chip growth across all geographies in 2004.
Semiconductor revenue in the North and South American markets grew 22.2% to $39.5 billion in 2004. European chip revenues rose 22.5% to $39.6 billion. Asia's semiconductor revenues grew 38.3% to $86.9 billion. Chip revenue in Japan increased 22.7% to $47.8 billion.
By individual product categories, DRAM had the strongest growth rate at 69.2%. Optoelectronic chips are expected to finish 2004 with a 45.9% growth rate as the market reaches $13.9 billion. The MOS logic market will grow 34.5% to $49.6 billion.
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