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Databeans 2005 forecast: semiconductor markets - worldwide

9 February 2005 News

It almost goes without saying that 2004 was a huge growth year for the semiconductor industry. Led by memory products and logic, the overall market was up an estimated 28% over the previous year. There were gains seen in every semiconductor category, from optoelectronics and sensors to MOS Micro and the discretes. Analog ICs alone grew an estimated 17% with over $31 bn for the year.

All of the excitement seems to have passed. The semiconductor market needs to stabilise itself in 2005, by way of clearing the excess inventory built up from overspending. For this year, Databeans expects that the overall market will be flat, generating an estimated $212 bn in revenue, which would equal a -1% change from last year. That is assuming that this market will correct itself with a combination of sustained demand for computers and consumer electronics, and with reduced capital spending on the part of suppliers.

China continues to be a region of focus for the semiconductor industry, as it will in the next few years become the largest market in the world, generating more semiconductor revenue than any other country or region. For example, as the US, Japan, and Europe have bought more cellphones and computers from China, the country's exports rose 33% in December of 2004, increasing the trade surplus to its highest level ever.

The Chinese government would like the country to become an exporter of higher 'value-added' goods such as technology products, while moving away from cheaper consumer goods and commodity textiles. It also wants to develop exports by its own domestic companies, rather than having to rely upon exports from foreign multinational corporations.

Looking ahead into next year, the semiconductor outlook is brighter, with growth expected across all segments. Databeans considers 2006 a return to growth year, with that growth to be sustained well into 2007.

Global revenue forecast for semiconductors by major product segment
Global revenue forecast for semiconductors by major product segment

For more information contact Susie Inouye, Databeans, [email protected], www.databeans.net





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