Worldwide IC market to plummet

APRIL 2--IC Insights Inc. (Scottsdale, AZ; www.insights.com) has reversed its 2001 worldwide IC market forecast from a 7% rise to a 9% drop. On the other hand, the market researcher has doubled its 2002 forecast from a 9% growth to an 18% increase.

The research firm attributed its calculated 7% rise in 2001 to an estimated 3.4% worldwide gross-domestic-product (GDP) growth rate and a 7% climb in electronic system sales. When market conditions indicated only a 2.8% rise in worldwide GDP and just a 4% jump in electronic system sales, IC Insights downgraded its initial forecast.

The 2001 IC industry is being driven by three market conditions associated with pushing the IC market downward--the IC unit inventory burn rate, wafer start overcapacity, and a global economic slowdown. The result, says IC Insights, is that 2001 will be only the second year since 1985 to exhibit a decline in IC unit volume shipments.

Favorable global economic conditions and balanced IC inventories are expected to drive a double-digit rebound in 2002 for the worldwide IC market. Year 2001 is being described as an adjustment year and 2002 as a recovery year. The stocking of IC units during the latter part of 2001 is not anticipated to spur recovery in the second half of 2002. Increased IC demand in 2002 is seen as being driven by new ICs.