EBN (10/16/2002 6:19 PM EST)

SAN JOSE -- Some telecom segments will remain depressed, but semiconductor sales will rebound to 18% growth next year, with even higher expectations for 2004 and 2005, according to a forecast given by In-Stat/MDR at the Microprocessor Forum here today.

"It's not going to be a spectacular growth year (in 2003), but there will be some places of substantial growth," said Christie Van Gaal, senior director of content development for In-Stat/MDR.

According to the analyst firm, semiconductor sales will remain around $138 billion in 2002, flat with 2001, but grow to $164 billion in 2003. The market should push past the 2000 high-water point in 2004, with sales of $214 billion, and rise to $242 billion in 2005.

Growth next year will remain sluggish in the first and second quarters, Van Gaal said, with a significant uptick beginning in the third quarter.

Revenues for WAN equipment, however, will continue to slide next year, she said. The market is expected to drop from $137 billion in 2001 to $115 billion this year, and drop again to $106 billion in 2003, before rebounding to $115 billion in 2004.

Key LAN and customer premise equipment markets are expected to remain strong in 2003, after providing some of the few growth markets this year. The wireless LAN market, which In-Stat/MDR says had 17% growth this year to total $2 billion, is expected to grow 47.5% next year, to push the market to nearly $3 billion.

Other growth segments include DSL and cable modems, LAN telephony equipment, LAN switches, enterprise security equipment, and NICs.