After a decline of almost a third in 2001 and a lacklustre 2002, the worldwide semiconductor market finally picked up in 2003 with sales growth of 18.3 per cent, according to research from In-Stat/MDR.
It predicts that growth will be even stronger in 2004, with sales jumping by 29 per cent - bringing total revenue to $214.7bn (£120.5bn) and vying with 2000 for record-high annual revenue.
But the analyst added a note of caution. "Although we do not expect a replay of 2001 anytime soon, the strength of the current recovery should not be interpreted as a return to the good old days," said Mark Kirstein, In-Stat/MDR's general manager, in a statement.
"Fundamental changes are taking place in both the demand and supply aspects of the semiconductor market that will cause the next decade to be significantly different from the last."
Semiconductor prices are expected to rise moderately in the short term as capacity tightens, but over the long term this price erosion will cause revenue to grow somewhat more slowly than unit shipments.
In-Stat/MDR said that, on the demand side, there is no new "killer app" on the horizon to drive future market growth as PCs and mobile phones did in the 1990s.
And the wide variety of lower volume products that have emerged are subject to standardisation and extreme competition, both of which tend to suppress prices and limit revenue growth.
Robot can assemble Ikea furniture in under 10 minutes - several hours less than the average human
Researchers claim to be one step closer to developing flexible screen televisions, tablets and phones
Thanks to the creation of an ultrafast, nanoscale transistor
The 'first demonstration' of a scalable method for manufacturing graphene
Lifted off on a SpaceX Falcon 9 rocket today following postponement on Monday