The Semiconductor Industry Association (SIA) said it expects 2004 chip sales to grow 28.6 percent, to $214 billion, topping the $204 billion the industry recorded at the height of the dot-com boom in 2000.
But the agency also reiterated that chip sales are expected to grow only 4.2 percent in 2005 to $223 billion and actually decline by 0.8 percent in 2006 to $221 billion—the bottom of the next downturn.
The chip industry has slowly recovered from the steep drop in sales that occurred in 2001 and 2002, when the dot-com industry stumbled and sales of servers and other complementary hardware slowed as well.
The SIA said the chip industrys recovery will arrive a year earlier than expected. Companies such as Intel Corp., meanwhile, have reported record revenues as they have led the recovery.
"The industry is experiencing substantially stronger-than-expected growth in 2004 as a result of underlying strength in a broad range of end-use markets," SIA president George Scalise said in a statement.
"We now expect that worldwide industry sales will surpass the previous record one year earlier than previously projected. For the longer term, we project a compound annual growth rate of 10.4 percent through 2007, when we expect that worldwide sales will reach a quarter of a trillion dollars," Scalise said.
"While this growth rate is lower than the historical growth rate of the past several decades, it represents very healthy growth for a $200-plus-billion industry."