Electronic Design

ICs: A Good Year In 2003, A Better One In 2004

Total IC shipments should grow by nearly 18% this year, with revenue growth slightly exceeding 20%. This follows a very successful 2003, when shipments grew by 14.9% and revenue increased by 16.1%, thanks to the first increase in average selling price (1%) since 2000. The gains follow a "horrible" 2001 and a mediocre 2002, according to "The Worldwide IC Packaging Market," a report by Electronic Trend Publications.

The report says growth in shipments will slow considerably next year, and a decline in average selling prices will actually bring about a drop in revenues. This is just part of the typical semiconductor economic cycle, according to the report: "In looking back at the industry's history, there have never been four consecutive years of high unit growth," it says. "However, solid unit growth should return in 2006-2008"

Overall, the compound annual growth rate for IC shipments from 2003 to 2008 should be 10.6%, from 90.3 billion units in 2003 to 149.2 billion in 2008. Revenue growth should also resume in 2006 and should nearly equal unit growth throughout the forecast period, says the company. But it notes, "Though the prospects for unit growth seem solid, the myriad forces of supply versus demand make any forecast of semiconductor revenue growth a frustrating exercise."

Electronic Trend Publications Inc.

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