A semiconductor industry group Wednesday joined the ranks of prognosticators reducing sales estimates for next year, but remained more optimistic than Wall Street observers.
The Semiconductor Industry Association reported that worldwide sales of semiconductors are expected to increase by 19.8% in 2003 to $169 billion. The industry trade group's previous forecast in June pegged growth in 2003 at 23.2%, to $177 billion.
Worldwide semiconductor sales in 2002 are expected to grow an anemic 1.8%, while growth is expected to increase to 21.7% in 2004, according to the SIA. In June, the SIA predicted sales would grow 3.1% this year and 20.9% in 2004.
"The long-awaited recovery is under way," said
Chairman Jerry Sanders III in a press release. "We believe the next several years will see steady growth following the industry's steepest-ever decline in 2001."
Annual growth rates of 8% to 10% will be the norm going forward over the longer term, Sanders added, saying that represents a "sea change" for the industry. "We can no longer count on the proverbial rising tide that lifts all boats," he said.
Nearly 20% growth in sales next year, however, is still well above Street estimates, which have been coming down in droves in recent weeks.
Earlier this week, Douglas Lee of Banc of America reduced his 2003 growth forecast for semiconductor industry sales to the range of 8% to 10%, down from his previous estimate of 15%. He said he expects sales to be flat year over year in 2002.
And on Oct. 1, Lehman Brothers hardware analyst Dan Niles lowered his 2003 estimate for semiconductor revenue to 13% to 15% growth from 18% to 20% growth, based on tougher comparisons and telecom weakness.
The Philadelphia Stock Exchange Semiconductor Index closed Wednesday up 3.9% at 329.84.