IDC Maps Out Worldwide PC Semiconductor Market’s Road to Recovery

FRAMINGHAM, Mass., March 1, 2000 – After three years of oversupply, pricing of semiconductor components began to stabilize during the second half of 1999, putting PC semiconductor revenues on the path toward recovery. By the time 1999 ended, these revenues had taken an 18% leap forward from their 1998 level and reached $42.6 billion. IDC expects total PC semiconductor revenues to increase 9% year-over-year, bringing the market's total to over $46.5 billion in 2000.

"Growth in the desktop PC semiconductor market is primarily fueled by a tremendous increase of sub-$1,000 PC shipments," said Josephine Mong, an analyst with IDC's Semiconductors research program.

According to IDC, the sub-$1,000 segment currently represents 15% of total desktop PC semiconductor revenues, and its share will more than double to almost 34% by 2003. "The low-end desktop PC market is not only becoming a key volume segment and a high-growth area, but also the new battleground among microprocessor companies," Mong said.

Although Cyrix, Centaur, and Rise simultaneously exited the market in mid-1999, IDC believes that a new set of competitors such as VIA, SiS, and Transmeta will emerge and vie for market share in either the low-end desktop or mobile PC space. Additionally, other factors driving growth in the PC semiconductor market in 1999 include strong demand for consumer PCs, stabilized microprocessor and core logic chipset pricing, as well as a rise in main memory content.

In 1999, main memory and microprocessors accounted for more than 77% of PC semiconductor revenues. IDC expects microprocessor semiconductor revenues to increase at a compound annual growth rate (CAGR) of over 14% through 2003, compared with a 4% CAGR for the overall market. Although Ethernet IC and modem revenues will total only $518 million and $984 million, respectively, by 2003, IDC expects these two types of components to show the strongest growth over the next four years, achieving CAGRs of 27.9% and 21.5%, respectively.

In the new report, Worldwide PC Semiconductor Market Forecast and Review, 1998-2003 (IDC #B21282), IDC sizes the worldwide PC semiconductor market from 1999 to 2003 for both desktop and mobile PCs by price bands and components. The report includes bill of materials data for each price band and form factor as well as analysis of market trends. Additionally, the report discusses the outlook of PC semiconductor technology for microprocessor, main memory, and graphics. To order a copy of the report, contact Patrick Steeves at 1-800-343-4952, ext. 6787 or at psteeves@idc.com.

About IDC

IDC delivers dependable, relevant, and high-impact data and insight on information technology to help organizations make sound business and technology decisions. IDC forecasts worldwide IT markets and technology trends and analyzes IT products and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC is committed to providing global research with local content through more than 500 analysts in 43 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, and the financial community. Additional information can be found at http://www.idc.com.

IDC is a division of International Data Group, the world's leading IT media, research, and exposition company.

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