The Channel logo


By | Tony Smith 26th October 2004 10:05

Chip capex set to fall in 2005 - analyst

Downturn to segue into slump?

Spending on new chip-making equipment will fall next year - or, at the very best, match 2004's level - according to a new forecast from market watcher IC Insights.

The latest prediction effectively reverses the seven per cent growth the researcher had previously said it expected to see through 2005. Now, says IC Insights, 2005 will see "flat to negative growth".

That compares with Gartner's forecast, made earlier this month, that 2005 capex will grow just 0.4 per cent, down from a July 2004 estimate of 13.4 per cent growth.

Both downward revisions are based on today's slowing demand for chips, which will persuade chip makers they will need less capacity next year. The current slowdown has to an extent pre-empted industry anticipation that demand would start to tail off toward the middle of 2005 in any case.

With 2004 capex expected to come in at 53 per cent above 2003's level, there's clearly going to be less need for new plant and equipment next year given the current trend.

The slowdown will see Q4 sales coming in up to three per cent above Q3's total, IC Insights now believes, down from its previous forecast of 3-5 per cent. ®

Related stories

Nvidia up Q3 sales forecast
Weak US drags down PC sales growth
Chip makers' efforts fail to cut excess inventory
Chip biz slowdown to stretch through Q1 '05
Analyst lifts 2004 chip capex forecast...
World chip sales flat in August
Laptops, servers buoy Intel's results
Transmeta loss widens as revenues miss target

alert Send corrections


shutterstock_183801788_container ship

Chris Mellor

The SAN growth glory days are well and truly over, so where next?

Tom Whipp

Insurance industry insider tells all
Crypto fingers
Kids on wall. Pic: US Army/Capt Emily Skolozynski


Better to play nicely than try to muscle in on territory


Michael Dell. Pic by Joi Ito
Cool Texas dude is just your average billionaire
The Seeing Eye by Valerie Everett, Flickr, CC2.0
Follow the money – or, at least, our projections
Boats storm girl photo via Nikolina Mrakovic
The puppets from Team America: World Police gather at a bar for drinks.