Chip market to grow 23%

The semiconductor market will grow 23% in 2002 to $374 billion, buoyed by this year's inventory cutting and renewed consumer demand, according to US technology market forecaster, Semico Research.

After a flat first quarter next year, the market will grow sequentially in the high single digits for the following three-quarters, said Semico president, Jim Feldhan. The industry will continue to grow through 2004, hitting $585 billion before another cyclical slump in 2005, Feldhan said. The return to growth is down to a reduction in the large inventories that have plagued chip makers since the slowdown hit. "Our belief is that inventories will be absorbed this year and any remaining inventory will be obsolete," Feldhan said. However, Semico expects the real key to be increased consumer spending on hi-tech products. Feldhan said that tax reductions by the US government could help stimulate spending there.