SIA's Forecast Far Too High, Analysts Say Sales Outlook At Odds Some investment pros saying chip trade group has rose-colored glasses.(A)

Byline: JAMES DETAR

Ignore those signs pointing the other way. Things are looking up for the semiconductor industry, says a leading trade group.

On Monday, the Semiconductor Industry Association gave an updated 2003 sales forecast. It says chip revenue will grow nearly 20% this year, the same as its preliminary prediction in November. But that number far exceeds estimates by some investment banks, whose analysts chided the trade group for being overly optimistic.

The SIA says it expects worldwide sales of $169.3 billion, up from $140.7 billion in 2002 though still far south of 2000's record $205 billion. Those 2002 sales represented a 1.3% increase from 2001.

"It's our view that 2003 will be a year of growth," SIA President George Scalise said in a conference call with analysts. "It's clear there is a strong possibility this forecast will be realized."

Not so, say some analysts. Banc of America Securities LLC and Merrill Lynch & Co., among others, say chip sales won't grow nearly as much. Banc of America predicts 10% growth, Merrill Lynch 12%.

"The December numbers were pretty good, but it seems very difficult to justify 20% annual growth," said Merrill Lynch analyst Joseph Osha in San Francisco.