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Global chip sales looking up

A better-than-expected first quarter boosts the forecast for the 2003 worldwide semiconductor market, according to a Gartner study.

A better-than-expected first quarter of the year boosted the forecast for the 2003 worldwide semiconductor market, according to a Gartner study.

The technology research firm predicted that the global chip market would grow 8.3 percent with a total revenue of $168 billion in 2003, compared with a total revenue of $155 billion in 2002.

Earlier this year, Gartner said the worldwide semiconductor market would grow 8.9 percent this year. But analysts at the firm said the forecast had been recalibrated, based on final 2002 data and information gathered for the first quarter of 2003. The total revenue for the global chip market for 2002 was revised to $155 billion from $153.4 billion.

Gartner said the industry enjoyed a relatively strong first quarter in 2003 bolstered by better-than-expected semiconductor sales in March. Research showed that businesses are not yet feeling confident enough to invest and are cautiously approaching their PC replacement cycles.

Digital cellular handsets, flat-panel displays and digital video consumer products are expected to have strong growth in 2003, Gartner predicted. The cellular phone handset application continues to prop up the semiconductor industry, driving demand for memory, image sensors and other components.

Gartner said drivers for liquid crystal displays (LCDs) and application-specific devices for consumer electronics are showing strong potential for growth.

Other industry watchers like the Semiconductor Industry Association (SIA) and In-Stat/MDR also anticipate growth this year. The SIA forecasts a 20 percent increase in chip sales for 2003. In-Stat/MDR projects global chip revenue to generate $164.2 billion this year.