The chip industry's lead trade group today projected it will squeeze out 10.1% sales growth in 2003, halving the forecast it issued last November. The Semiconductor Industry Association's new outlook is similar to or only slightly above that of most Street analysts, many of whom are gearing for chip revenue to grow in the single digits this year. Meanwhile, the SIA predicts that over the entire period between 2003 and 2006, the industry should grow at a compound annual growth rate of only around 10% -- considerably below its historical growth rate of over 16% a year. "That's consistent with what we think market demand is going forward as a maturing industry," said President George Scalise on a conference call. The more sober outlook marks a turnabout for a trade group known for its overly cheery predictions. "The most interesting thing is that their predicted long-term growth rate is slowing," said Charlie Glavin, an analyst for ThinkEquity Partners, noting the SIA has been "historically overly optimistic." He says the SIA's 2003 outlook seems more or less realistic, on par with his own expectation for 9% growth this year. Explaining why the SIA slashed its initial 2003 projection, Scalise said, "Certainly when things started out at the beginning of the year we felt that could very easily develop. But the industrial base for PC consumption did not really materialize as early as anticipated, and beyond that I think Middle East turmoil and the apprehension that followed did have some impact. Combined, they dampened demand."