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.