The semiconductor industry will see strong growth this year, but will avoid the overheated expansion that led to the market downturn in 2001, according to a new report.
Market researcher iSuppli predicts that global semiconductor revenue will rise to $226.5bn in 2004, up 24.4 per cent from $182bn in 2003.
Its previous forecast, released in April, predicted only 19.8 per cent semiconductor growth in 2004.
Growth will slow in 2005, but will still manage a respectable 11.8 per cent rise to reach $253.3bn for the year, the report said. But the chip market will be virtually flat in 2006, with growth of just 0.1 per cent.
"All application markets for semiconductors are back in positive territory in 2004 and all the regions will experience growth this year," said Gary Grandbois, principal analyst for linear and power management at iSuppli, in a statement.
"Compared to 2000, this cycle is much more moderate and much more balanced. In the future, we'll look back at 2004 and describe them as 'the good old days'."
iSuppli expects a new growth cycle to commence in 2007, when sales will rise 9.2 per cent to reach $276bn. Chip revenue will increase another 10.4 per cent in 2008 to hit $305.4bn.
On the demand side, it is predicted that all major electronic equipment application markets will experience growth in 2004, driving broad semiconductor demand for the first time since 1999.
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