The US-based Semiconductor Equipment and Materials Internationalindustry group presented forecasts from eight major research houses predicting revenue growth of between 19.4 and 32 percent for this year from 2003.

Last year, the sector churned out global revenues worth 166 billion US dollars, up 18 percent from 2002.

In line with the industry upturn, semiconductor makers are also expected to spend more on capital equipment and materials this year, SEMI president and chief executive Stanley Myers told a media briefing to open a three-day industry conference.

Spending on equipment globally is likely to total at least 31 billion dollars in 2004, 41 percent more than 2003 while materials purchases would increase 13 percent to 26 billion dollars for the year.

"After three very, very difficult years, we are now in another up cycle," Myers said.

"The semiconductor device equipment and materials segment, we believe are heading for strong growth in 2004, driven by overall economic recovery and increased demand ... I should say an unquenching thirst in some areas for a wide range of electronics products."

According to SEMI, the electronic-end equipment market, comprising products such as mobile phones and laptops, was worth 845 billion dollars in 2003 and is tipped to expand to at least 1.07 trillion dollars in 2006.

Myers said this year's upturn is also expected to continue through to 2005 as the sector rides on the strength of the expanding global economy.

"The fundamentals are in place barring any significant world catastrophe," he said.

"Not that it will be a boom year but we do think 2005 will not be a falling off the cliff year... consumers' confidence is up, people are spending more."

One company expecting to benefit from the industry upswing is the Singaporean unit of Taiwan's United Microelectronics Corp., the world's second largest chip foundry.

The unit, United Microelectronics Corp. International (UMCI), is aiming to increase production at its Singapore plant this year from 2,000 wafers a month to more than 10,000, the level at which it will start generating a profit.

"For UMCI, we see a very, very strong demand," UMCI president Chris Chi told the media briefing, adding the main hindrance was a shortage of equipment supplies.

Chi said UMCI's aim was to eventually ramp production up to 40,000 wafers, which is the full capacity of the Singapore plant.

Last month, United Microelectronics Corp. reported first quarter net profits rose more than 16-fold from a year earlier to 208 million dollars on robust demand worldwide and said the trend was expected to continue in the second quarter.

The world's biggest chip foundry, Taiwan Semiconductor Manufacturing Co., expects record sales and profits in 2004, based on the company's strong performance in the first quarter to March.

TSMC said last week that it expects its wafer shipments in the second quarter to rise 10 percent from the previous three months.

In another sign of the industry upturn, Singapore's Chartered Semiconductor surprised the market with a return to profitability in the March quarter with profits of 1.89 million dollars from a 82.16 million dollar loss a year ago.

SPACE.WIRE