Chip volumes hit record high

The report, released Tuesday, shows semiconductor sales, which include PC processors, embedded processors, and solid state chips like flash memory, grew from $US11.5 billion in July, 1999, a 50 per cent increase.

The SIA credits increased demand for Internet infrastructure and wireless communications for strong semiconductor sales in all geographical regions. The Asia Pacific and Japan markets grew 57.3 per cent and 52 per cent respectively from last year. The Americas market increased 46.1 per cent from the previous year, and sales in Europe grew by 46.5 per cent, according to the report.

Looking ahead, the SIA predicts that by the end of this year, the worldwide semiconductor industry will have experienced a 31 per cent growth for the year 2000.

Fast-forwarding to 2004, industry research firm, Cahners In-Stat Group, predicts that a continued strong worldwide economy will drive semiconductor sales by a compound annual growth rate of 16.2 per cent from 1999 to 2004, reaching $US316 billion.

But Cahners warns that trends towards outsourcing, consolidation, e-virtual supply chain management, and greater roadmap synchronisation between chip makers and computer manufacturers will cause demand for semiconductors to begin to level off by 2002, creating a surplus of semiconductors.

Intel spokesperson Chuck Mulloy said the chip mammoth is "putting in place capacity for a fairly strong market going forward," but makes no official assumptions on sales figures.

"You have to forecast demand but you also have to stay ahead of the technology curve," said Mulloy.

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Dan Neel

PC World
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