Semiconductor market set for bumper 2004

Stronger than expected mobile phone and PC shipments will make 2004 a bumper year in the semiconductor market, with analysts predicting the market will rise 18 per cent over the coming 12 months.

Analyst IDC forecasts "a very strong recovery" in the second half of 2004, primarily driven by double-digit growth in mobile phones and PCs during this year and next that will drive growth.

According to research by the analyst organisation, mobile phone shipments will surpass 530 million units this year, while PC shipments will grow by 11 per cent, surpassing 152 million units.

From 2003 to 2008, IDC estimates that the semiconductor market will grow at a compound annual growth rate of 12 per cent, rising from $160bn (£89bn) revenue this year to $282bn in 2008.

Mario Morales, IDC vice president of semiconductor research, said China has become a fertile ground for "disruptive innovation", as its low-cost suppliers aspire to move upmarket.

"IDC expects these emerging Chinese semiconductor companies will play a key role in shaking up the competitive ranks among original equipment manufacturers, original design manufacturers, and semiconductor suppliers over the next five years," he said.

"Mainland Chinese semiconductor demand currently represents over one-quarter of the $60bn total for Asia/Pacific and will account for almost half of the entire region by the end of our forecast period."