Chip market sets records in 1999

Chip sales rose 22 per cent in 1999 to a record $168.6 billion, exceeding

even the most optimistic forecasts, according to figures released by Dataquest

in San Jose. Last year’s global chip market compares to the $138 billion

market of 1998. The previous record was set in 1995 when sales reached $151

billion.

Market growth was driven by a combination of higher DRAM prices, sparking a

46 per cent jump in DRAM sales volume. And the market benefited from strong

demand for high-priced chips such as digital signal processors, graphics

controllers and other communications and Internet-related ICs. "The memory

market made a big comeback, fueled by the revival in DRAM, which grew 46 per

cent in 1999, and the shortage of flash capacity," Joe D'Elia, director of

Dataquest's European Semiconductor Research, said.

Chip shortages are expected for the latter part of the year as chipmakers,

having under-invested in new plants and equipment during the 1996-1999

recession, will be unable to keep up with demand for flash memories and a range

of other products. Intel easily remained the top chip producer with 1999

revenues of $26.8 billion, nearly 155 of the total world IC market, and up from

$22.8 billion in 1998. The next largest chipmaker, 2 NEC had only $9.2 billion

in revenues up from $7.9 billion in 1998.

The Asia/Pacific region, without Japan, posted a 33 per cent growth in chip

sales, while the U.S. market expanded just over 18 per cent growth. Europe’s

chip market grew nearly 13 per cent.