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Chip Market Set to Climb

Demand for mobile phones will drive sales, researcher says.

By Scarlet Pruitt, IDG News   

The worldwide semiconductor market is due to grow 8.3 percent to $168 billion in 2003, according to analyst firm Gartner, driven by high demand for cell phone handset applications.

The forecaster said that the prediction released Tuesday was in line with previous estimates for 2003 market growth. However, Gartner Research Vice President Richard Gordon conceded in a statement that "geopolitical uncertainty" made predictions for the second half of the year "stubbornly elusive."

While cell phones and the LCD driver market have buoyed the industry, the war in Iraq, the lingering economic downturn, and the outbreak of severe acute respiratory syndrome (SARS) have created a climate of uncertainty, Gartner said.

Doubts Remain

What's more, companies are not feeling confident enough to replace older PCs, the analyst firm said.

Gartner said that March semiconductor sales were better than expected, prompting it to predict 2003 growth in the high single digits. However, Tuesday's 8.3 percent growth prediction is down from Gartner's first quarter forecast of 8.9 percent.

Worldwide 2002 revenue from the semiconductor market came in at $152 billion, according to Gartner.

Gartner analysts weren't immediately available to comment further on the results Tuesday.

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