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!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
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

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

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?