The semiconductor industry is facing the worst decline on record, according to a leading US market research firm.
IC Insights has lowered its 2001 worldwide semiconductor market forecast to $139.3bn in sales, a 21 per cent decline from the $177bn in 2000. If the prediction proves correct, 2001 will surpass 1985's record slide of 20 per cent.
The research company said that its "best case" scenario for the chip market in 2001 is a 15 per cent decline from 2000, and its "worst case" scenario is a 28 per cent drop.
Assuming that the US is not in an outright recession, IC Insights still expects a quarterly sequential increase in the chip market of six per cent to occur in the third quarter, and an 11 per cent sequential jump is forecast for the fourth quarter.
The company believes that the market will continue to recover to reach $162bn in 2002, a 16 per cent increase over this year.
It also said that, from 1995 through 2001, the semiconductor industry will have spent about $250bn in capital expenditure to receive only about $50bn in additional semiconductor sales during the same time period.
On 30 March, IC Insights lowered its worldwide chip sales forecast to a decline of nine per cent sales growth from an earlier estimate of seven per cent.
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