Gartner raises 2005 chip industry growth forecast

Market researcher Gartner raised its global chip industry revenue growth forecast a tad, but predicted three sluggish years for chips in 2005 to 2007.

Gartner raised its forecast for global semiconductor industry revenue growth for several reasons, including signs of stronger than expected sales of personal computers and mobile phones, a researcher at the company said Monday.

Chip industry revenue will likely grow 5.9 percent this year to US$232.9 billion, up from a previous estimate of 3.4 percent growth, Gartner said.

However, the revised forecast is still a drop from the semiconductor industry's 23.4 percent growth last year, and 2005-2007 are likely to be "three years of sluggish growth" before chips take off again in 2008, said Andrew Norwood, a vice president of research in Gartner's semiconductor division, during the company's 11th annual Semiconductor Roadshow in Taipei.

"It's very strange to see three years of sluggish growth" due to the boom-bust nature of the chip industry, said Norwood. Normally, the chip industry runs in fairly regular three year cycles, of one or two strong years followed by a downturn -- caused mainly by chip companies building too many new factories. Companies tend to invest more in expensive new chip factories during upturns, until too many come online and cause a glut.

Memory chip production, out of step with the rest of the industry, is the reason for the strange pattern that Gartner predicts for the semiconductor industry over the next few years, Norwood said.

Makers of commodity memory chips, mainly DRAM (dynamic RAM) and NAND flash memory, have not invested in new factories at a normal pace because of heavy losses during the previous downturn. They've become more cautious, Norwood said.

Normally a strong year like 2004, when memory chip revenue grew 43.4 percent US$48 billion, would be followed by a downturn. Instead, the segment won't see a downturn until 2007, Gartner predicts, after 3.2 percent revenue growth this year, and 0.6 percent growth in 2006. In 2007, memory chip revenue will likely decline 9.6 percent, Gartner said.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Dan Nystedt

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Kurt Hegetschweiler

Brother PocketJet PJ-773 A4 Portable Thermal Printer

It’s perfect for mobile workers. Just take it out — it’s small enough to sit anywhere — turn it on, load a sheet of paper, and start printing.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?