One of the key bellwethers in the computer industry is pointing toward a solid year of growth in 2004 for manufacturers of computers, cellphones, semiconductor chips and other electronic equipment.
According to a Reuters report, global revenue from semiconductor sales could rise by 33 percent to $189.6 billion in 2004, driven by a 20 percent increase in output.
“The chip- making industry finished 2003 with an 18.4 percent increase in sales over 2002,” according to a report by VLSI Research, Santa Clara, Calif., a consulting firm that tracks the semiconductor industry. “Conditions are ripe for the upturn. For chip makers, three years of withholding on IT upgrades will result in a boom similar to the 1999-2000 ‘year 2000’ phenomenon.”
Decisions by Microsoft to stop supporting old Windows software programs would force companies to buy more powerful PCs to run newer versions of Windows, while consumers were upgrading their cell phones and buying new gadgets such as digital music players and DVD recorders, VLSI said. Chip makers have run their factories at around 90 percent of total capacity in 2003. The demand spike can only be met if they invest aggressively in new production equipment.
“Expect a major expansion in 2004, with annual growth for the chip equipment market on the order of 40 percent,” VLSI said.“This represents a turning point from one of the longest and deepest downturns in industry history,” VLSI said. Equipment sales in 2003 were half of their peak in the year 2000.”