Gartner predicts semiconductors will grow 23% in 2004

The worldwide semiconductor industry continues to gain momentum from last year, and worldwide semiconductor revenue is projected to reach $217 billion in 2004, a 22.6 percent increase from 2003, according to preliminary quarterly estimates by Gartner, Inc.

“A tighter supply environment in 2004 will bring increased revenue and profitability to the industry, and as semiconductor vendor financials improve, capital spending should increase,” said Richard Gordon, research vice president for Gartner. “Overall fab utilization is currently running in excess of 95 percent, which is about 10 points higher than the traditional trigger point for additional capital spending in the industry.” The 2004 forecast is deliberately conservative. Even though many of the traditional supply side fundamentals point to strong growth, Gartner analysts said there are some doubts about the demand side of the market. There is a concern whether consumers will continue to spend on electronics goods while businesses are still being cautious about investing in IT.

Worldwide Semiconductor Revenue Forecast, 
2004 First Quarter Update
(Billions of U.S. Dollars)

                 2002   2003   2004   2005   2006   2007   2008  2008
  Revenue       155.8  177.0  216.9  245.8  240.2  265.3  293.8  10.6%
  Growth (%)           13.6%  22.6%  13.3%  -2.3%  10.5%  10.7%
Source: Gartner Dataquest (February 2004)