The semiconductor market will grow at 18 percent in 2004, according to International Data Corporation. The growth will be driven by stronger than expected mobile phone and PC shipments. The technology analyst predicted that unit shipments of both mobile phones and PCs will grow in double digits this year and next year, which will drive a healthy growth cycle for over half the semiconductor industry. Over the next five years to 2008, IDC has predicted the worldwide semiconductor market will grow at a compound annual growth rate of 12.5 percent, rising from $160bn (£89.9bn) in revenue in 2003 to $282bn in 2008.
China -- which currently accounts for over a quarter of the $60bn demand for semiconductors in the Asia Pacific region and which is expected to grow to over half the demand by 2008 -- will benefit from the pressure on original equipment manufacturers and chip suppliers to increase profit and revenue, which has led to a trend in outsourcing.
"As a result of this ongoing trend, China has become a fertile ground for disruptive innovation as its low-cost suppliers naturally aspire to move up market," said Mario Morales, vice president of IDC's Semiconductor research at IDC. "IDC expects these emerging Chinese semiconductor companies will play a key role in shaking up the competitive ranks among original equipment manufacturers (OEMs), original design manufacturers (ODMs), and semiconductor suppliers over the next five years."
IDC said the key trends to watch in the market were: