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Dataquest predicts semiconductor sales will rise 12%

Dataquest has predicted that next year worldwide sales of semiconductors will rise 12% to $172bn (£110m), driven in part by...

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Dataquest has predicted that next year worldwide sales of semiconductors will rise 12% to $172bn (£110m), driven in part by increased sales of digital mobile phones, as people upgrade from second generation (2G) phones to 2.5G devices.

The chip industry has been in the doldrums ever since the collapse of the dotcom market in early 2001.

Dataquest believed a further boost would occur in 2004, when businesses can no longer afford to hold off on upgrading their PCs.

Semiconductor companies will experience flat growth in 2002, with projected 2002 revenue of $153.3bn (£98.3bn), up 0.5% from 2001 revenue of $152.5bn (£97.8bn), Dataquest said. But the industry is making it back from the huge decrease in revenue from the 2000 fiscal year, when semiconductor companies posted $217.4bn (£139bn) in revenue.

Chip manufacturers, however, were not so optimistic. Intel stuck to its prediction of flat revenue growth for the fourth quarter, and said it has not seen a recovery in its business. Intel cut expectations for capital spending in 2002 to $4.7bn (£3bn), down from $5bn (£3.2bn) to $5.2bn (£3.3bn), during its third-quarter earnings presentation.

Advanced Micro Devices is expected today to affirm a revenue boost of 20% in the fourth quarter based on its efforts to correct inventory problems, and amid strong seasonal demand for PCs and flash memory. However, AMD is also scheduled to release details of a company restructuring that will result in layoffs.

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