Revenues in the Worldwide PC Semiconductor Market Spiral Downward, IDC Says

MOUNTAIN VIEW, CA – AUGUST 8, 2001 – In the past year, PC semiconductor suppliers have experienced a complete reversal of fortune. From March through August 2000, they worked feverishly, struggling to fulfill extraordinary demand, but since then demand has plummeted semiconductor vendors watch as their revenues precipitously fall. According to IDC, the market will not after recover until after 2005.

 

"The U.S. PC market in units will decline for the first time ever this year, and worldwide growth will only be in the single digits. Naturally, this decline impacts PC semiconductor suppliers severely," said Shane Rau, senior analyst for IDC’s Semiconductor: Desktop and Mobile PCs research program. "Even though inventories for some semiconductors have burned off, demand remains very soft and will remain soft through the second half of this year."

IDC forecasts revenues in the total worldwide market will fall from $50.3 billion in 2000 to $38 billion in 2001 – a loss of $12 billion. The desktop PC semiconductor market will be hardest hit. Its revenues will free fall from $38.6 billion to $27.3 billion – a loss of more than $11 billion. Mobile PC semiconductors revenues will experience a drop of less than $1 billion, from $11.7 billion to $10.6 billion.

In terms of semiconductor components, microprocessors and DRAM lead the downward spiral. IDC estimates worldwide microprocessor revenue will fall from $27.1 billion in 2000 to $22.2 billion by the end of 2001. PC DRAM revenues will decline from $12.4 billion to $6.6 billion during the same time.

"Intel recently announced its microprocessor business has stabilized, and this announcement generated optimism that the downturn in the PC chip business is ending. However, we believe this optimism is unwarranted," Rau said. "Firstly, PC OEMs are sending different signals and secondly, while the microprocessor is a major chip inside any PC, it’s only one chip. Other semiconductor companies that make chips for the rest of the PC, such as DRAM suppliers, are not doing well, and we don’t think they will begin to recover until next year."

IDC recently published Worldwide PC Semiconductor Market Forecast and Analysis, 2000-2005 (IDC #W25081). This report forecasts desktop and mobile PC semiconductor revenues in the worldwide market, segmented by price band and components. Bill-of-materials data is also included for each price band and form factor. Major trends impacting the market are also analyzed. To purchase this report, contact Patrick Steeves at 1-800-343-4952, extension 6787 or at psteeves@idc.com.

About IDC

IDC delivers dependable, high-impact insights and advice on the future of ebusiness, the Internet, and technology to help organizations make sound business decisions. IDC forecasts worldwide markets and trends and analyzes business strategies, technologies, and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC provides global research with local content through more than 700 analysts in 43 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at http://www.idc.com.

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

 

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