2/2/2005 - Future Horizons, Europe's leading electronics analyst, has announced its Semiconductor Industry Forecast for 2005, predicting that the worldwide electronics industry is set to grow by at least 15 per cent during 2005 to $245 billion.
According to Future Horizons, the electronics industry was broadly flat in Q4 2004 and would remain so into early 2005, but that it would bounce back strongly in the second half of the year, yielding an overall integrated circuit (IC) unit growth in the nine per cent region, with Average IC Selling Prices (ASPs) up at least a further six per cent.
Overall IC unit growth, a bellweather of the electronics industry, slowed dramatically during 2004. Q2 and Q3 2004 both saw a fall off in the four per cent region as a result of capacity over shoot. Q4 2004 is looking to be slightly up on this, but Future Horizons believes that there is nothing wrong with the underlying IC end market demand. The second-half of 2005 will see a correction with IC unit shipments much closer to actual demand than for 2004.
Future Horizons said that growth in 2005 would be driven by the continued digitisation across all product segments, underpinned by a 8 per cent minimum growth in PC unit shipments. The mobile phone sector will continue to show growth, but consumer disappointment with 3G services and a massive 2004 handset overbuild in China could being to have a negative impact on the market.
"Future Horizons is again out on its own, predicting double digit growth of 15 per cent. The industry avoided over investing in capacity in 2004 for the first time in its history. The underlying trends are solid and short of the worldwide economy collapsing there is no reason why this shouldn't be an excellent year for the industry," said Malcolm Penn, CEO, Future Horizons.
Europe will continue to under perform all of its global competitors, driven by the lack of overall economic growth. The UK is doing fine economically, at least for the moment, but is no longer a force in the global electronics industry. The rest of the European Union is still a force, but is not performing well from an economic growth perspective. Future Horizons predicts that Europe will continue to loose worldwide market share of the global electronics and semiconductor markets over the foreseeable future.
Future Horizons bases its analysis on four fundamental market facets: the economy; unit demand; fabrication capacity; and industry confidence. The interaction of these four so-called semiconductor horsemen determines the market behaviour. It was the only analyst house to correctly forecast 30 per cent growth in 2004, 18 per cent growth in 2003 and zero growth in 2001.
The Future Horizons 2005 Semiconductor Forecast is available in the 'Annual Semiconductor Report 2005' from Future Horizons priced at £1,725 for a single user license.
About Future Horizons
Future Horizons, founded in 1989, is Europe's leading semiconductor analyst. It provides market research and business support services for use in opportunity analysis, business planning and new market development. Its industry information seminars and Forums are widely considered to be the best of their kind. Future Horizons publishes a series of monthly, half-yearly and annual market reports, with emphasis is placed on the worldwide microelectronics and electronics industry and the European market environment. See www.futurehorizons.com for further information.
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