IDC Forecasts 18% PC Semiconductor Revenue Growth in 2004

FRAMINGHAM, MA – MARCH 8, 2004 – Economic recovery and rising PC demand boosted the PC semiconductor market in the second half of 2003. However, revenue growth was largely limited to rising semiconductor unit sales, rather than rising prices, and to sales of systems to consumers, as opposed to corporations.

According to IDC's new study, Worldwide Desktop and Mobile PC Semiconductor Forecast, 2003-2008, the inflection point in the recovery of the PC semiconductor market during 2004 depends on the factors that were missing at the end of 2003. Beyond economic growth and the seasonal uplift, a continuing recovery will require sales to both consumers and corporations. IDC predicts that overall (desktop plus mobile) PC semiconductor revenue will grow 18.0% to $53.6 billion in 2004, the highest annual growth rate during the study's forecast period. From 2003 to 2008, IDC forecasts that the PC semiconductor market will grow at a compound annual growth rate (CAGR) of 7.8%, rising from $45.4 billion to $66.1 billion.

"The recovery of the PC semiconductor market will hit its stride in 2004, specifically in the second half of the year," said Shane Rau, IDC's lead PC semiconductor analyst. "Carrying the recovery along will be the key trends of mobility, connectivity, and increasing overlap between the consumer and PC markets."

Additional findings of IDC's study include:

• Mobile PC semiconductor revenue will grow at a healthy CAGR of 16.1%, as compared to desktop PC semiconductor revenue growth of 2.9%. As a result, mobile PC semiconductor revenue will nearly equal that of desktop PC semiconductor revenue by 2008, up from roughly 50% in 2003.

• While all mobile PC price bands will grow during the forecast period, only the desktop PC prices below $1000 will grow significantly during the same period.

• The PC processor and main memory subsystems will grow the most on an absolute revenue basis during the forecast period.

• The communications subsystem of the mobile PC semiconductor market will achieve the highest growth rate during the forecast period, driven by the growth of wireless connectivity, such as WLAN technology embedded in mobile PCs.

Worldwide Desktop and Mobile PC Semiconductor Forecast, 2003-2008 (IDC #30829) forecasts the total size of the worldwide desktop and mobile PC semiconductor market. Each form factor’s semiconductor revenue is segmented by price band. This document also presents a qualitative analysis of the desktop and mobile PC semiconductor market trends.

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About IDC

IDC is the premier global market intelligence and advisory firm in the information technology and telecommunications industries. We analyze and predict technology trends so that our clients can make strategic, fact-based decisions on IT purchases and business strategy. Over 700 IDC analysts in 50 countries provide local expertise and insights on technology markets. Business executives and IT managers have relied for 40 years on our advice to make decisions that contribute to the success of their organizations.

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