Worldwide chip sales are expected to rise 16.7 percent in 2003, largely driven by an anticipated upturn in business spending, according to a report released Tuesday by In-Stat/MDR.

Global chip revenue should bring in $164.2 billion this year, with most of the growth occurring in the second half of the year, the report says. The anticipated double-digit growth is in stark contrast to the meager 1.3 percent revenue growth that the industry fared last year, when a surge in DRAM (dynamic RAM) sales helped the industry to post positive growth, according to Steve Cullen, an In-Stat research director.

Although a chip recovery is predicted this year, Cullen said he remains cautiously optimistic.

"Over the last couple of quarters, business spending was affected by the questions 'Will there be a war?' to 'When will the war begin?' to 'How long will the war last?'" Cullen said. "By all rational expectations, most fears have been (alleviated). However, if the recovery is delayed by a quarter, it can affect the year's results."

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