Chip revenue grows 32% in Q1 as demand rises
Staff -- Purchasing, 6/17/2004 2:00:00 AM
Virtually every integrated circuit (IC) product family grew in the first quarter of 2004 over Q1 2003 with flash memory, programmable logic devices, DRAM and display drivers posting the largest increases.
In total, the 18 product categories that make up the total global IC market increased 32% in the first quarter compared to the first quarter of 2003, according to market researcher IC Insights. Unit shipments increased 26% indicating that prices, which had fallen for the past three years, were firming and rising in some cases.
In fact, the average price of a chip increased by 5% in the first quarter 2004 compared to the first quarter of 2003.
First quarter IC revenue grew 1% over fourth quarter 2003. That is unusual because in most years, semiconductor revenue will fall in the first quarter from the fourth quarter. The fourth quarter is usually the strongest quarter for chip companies because so much electronics equipment is built and shipped during the Christmas selling season.
Flash memory first quarter year-over -year growth was 70% as revenue increased from $2.27 billion in Q1 2003 to $3.88 billion in 2004, according to the Semiconductor Industry Association.
Flash grew because of strong demand from cellphone and consumer electronics equipment manufacturers. However, flash revenue dipped 2% from the fourth quarter of 2004 because much of the equipment in which it is used tends to be sold at the end of the year.
The strong year-to-year growth for flash is indicative of how flash is closing in on DRAM as the top memory IC in terms of revenue. Consider: In the first quarter of 2000, the flash memory market was one third the size of the DRAM market. In Q1 2004, flash was about 70% as large as the DRAM market, says market researcher IC Insights.
PLD shipments increased 65% in the first quarter from Q1 2003 to over $1 billion. PLD revenue also sequentially increased 19% from the fourth quarter of 2003.
DRAM revenue also increased year-to-year and quarter-to-quarter. DRAM sales in the first quarter were $5.45 billion, up 57% from Q1 2003. DRAM revenue also increased 7% from Q4 2003.
Of the 18 IC product segments, just read-only memory (ROM) suffered a decline in year-over-year revenue. It fell 11% to $55 billion. ROM also declined 28% from the fourth quarter of 2003.
IC revenue will have quarterly sequentially growth of 4%, 9%, 7% for the rest of the year. For the year, the IC market will grow 27% to $211 billion, forecasts IC Insights.
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