Iraqnophobia Revises 2003 Forecasts
The market analysts believe that business spending on IT will return in H2 2003, which will fuel demand. While the cell phone handset application segment continues to be the major driver in the market, the second phase of the market recovery requires a healthier PC market.
Looking longer term, the analysts say that a combination of pent-up demand and under-investment in fab capacity is likely to act to spur semiconductor unit shipment growth and stabilise device pricing making prospects for strong growth in 2004 and 2005.
Another market research organisation, IDC, says that a majority of companies in the US, Europe, and Asia/Pacific (85%) expect to increase or maintain their IT spending levels in 2003, but that economic stability and corporate profits remain key to the IT market rebound. The study was based on a survey of nearly 1000 CEOs and CIOs in 12 countries.
"Just as IT spending was severely disrupted in 2002 by wild card factors including WorldCom and Iraq, so it is that the outlook for 2003 remains clouded by similar uncertainty," says Stephen Minton, program director at IDC Worldwide IT Markets.
Another market research company - Semico Research - cuts 2 points off its growth forecast for the semiconductor industry this year. The company now expects a 23% increase in 2003.
Semico president Jim Feldhan says that the industry is suffering from "Iraqnpophobia" resulting from the "fear/uncertainty of war with Iraq". The effect includes uncertainty of oil supply, length of the coming war, use of chemical weapons and increased incidence of terrorist attacks.
