Phoenix Suns guard Walter Davis, a six-time all-star and his team's all-time leading scorer, said yesterday he plans to retire after the 1988-89 season and devote his time to a youth drug-abuse treatment center he is founding in Phoenix.

Davis, who removed himself from the starting lineup before Friday night's game at Portland, said he has been thinking about when he would end his career for the past few weeks.

"Next year will be my last. Next year will be it for me," said Davis, in his 11th season. "I'm 33 and next year is the last year on my contract. You have to start thinking, 'What comes after basketball?' "

Davis scored 16 points in Friday night's 128-119 loss to Portland, leaving him just two points shy of the 15,000 mark in his NBA career heading into Saturday night's game here against Sacramento.

Davis, the NBA's rookie of the year in 1977-78, had problems off the court the past three years.

On Dec. 11, 1985, after tying his then career-high with 43 points in a game against the Golden State Warriors in Oakland, Calif., Davis was admitted into a Van Nuys, Calif., clinic for an undisclosed substance-abuse problem.

He returned to the team Jan. 10, 1986, and told reporters his problem was "cocaine and alcohol."

Last April 16, Davis turned himself in to NBA authorities for his second drug rehabilitation in 16 months and was suspended from the team without pay.

That came after he was granted immunity last March 24 to testify before a Maricopa County grand jury probing alleged drug use by the NBA team, which led to the indictments of 13 people, including Suns center James Edwards and guard Jay Humphries on charges of trafficking in cocaine and other illegal drugs.