Market researcher Gartner Inc. raised its forecast for worldwide semiconductor revenue this year to $226 billion, and downplayed fears that the market was showing signs of an excess of supply.
Compared with 2003, semiconductor sales are expected to increase by 27.4 percent, the Stamford, Conn., firm said. Gartner had previously predicted a jump of more than 25 percent.
An increase in inventory at the end of the second quarter had raised concerns among semiconductor vendors and distributors, who feared an excess of supply. However, inventories in the supply chain were at the "low end" of the caution zone, and are normal in a rising market, Gartner said.
Nevertheless, despite improving market conditions over the last several quarters and revenue growth this year that indicates the industry is currently in a "boom" cycle, semiconductor manufacturers are not breaking out the champagne, Gartner analyst Richard Gordon said.
Even though it's unlikely the industry could suffer anytime soon a severe downturn like the one that occurred in 2001 following the dot-com debacle, the memory is still fresh in the minds of executives, Gordon said. In addition, manufacturers and distributors are adjusting business strategies to the overall slowdown in the industry's long-term growth rate, Gordon said.
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