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Chip sales in Asia may dip 10 percent

Researcher Dataquest expects semiconductor sales in the Asia-Pacific region--except Japan--to drop almost 10 percent to $51.4 billion this year.

SINGAPORE--Semiconductor sales in the Asia-Pacific region--excluding Japan--are expected to drop almost 10 percent to $51.4 billion this year, according to researcher Dataquest.

This is "in line with the U.S. economic slowdown," Dataquest wrote in a report. Revenue reached $57 billion last year, up 33 percent from 1999.

Global sales are expected to drop 16.7 percent to $188 billion this year, from a record of $226 billion a year ago, Dataquest said. Last year's growth was more than 32 percent.

"The global demand slowdown, particularly in the U.S., since the fourth quarter of last year has greatly affected semiconductor growth in 2001," Dataquest senior analyst Philip Koh said. "The outlook in the semiconductor industry in 2001 is gloomy."

However, next year will witness "a fairly slow, anticipated recovery", bringing revenues to $213 billion worldwide and $59.5 billion in Asia-Pacific, according to the report.

"The semiconductors sector is expected to continue to expand in 2003 and 2004. However, near the end of 2004 or into 2005, the traditional imbalance of too many products is expected to again appear, initiating the next phase of the semiconductor cycle," the report said.

Many semiconductor firms have announced layoffs, losses and lowered forecasts amidst the U.S. slowdown. Chipmaker National Semiconductor said last week it would lay off about 10 percent of its 1,500 staff in Singapore and 2,500 employees in Malaysia. The move is part of the company's cost cutting measure of eliminating 1,100 jobs, or about 10 percent of its global workforce.

CNET Singapore's Irene Tham reported from Singapore.