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Politics : Formerly About Applied Materials

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To: StanX Long who wrote (55383)	11/13/2001 2:20:50 AM
From: StanX Long	Read Replies (2) of 70976

SIA Under Fire for Forecast Analysts divided over future growth By Alex Romanelli -- Electronic News, 11/12/2001 e-insite.net San Jose—The Semiconductor Industry Association (SIA) last week announced its forecast of 6 percent growth in 2002 for the chip industry with normal growth resuming in 2003, only to be met with immediate skepticism. Lehman Brothers claims the SIA forecast is too high. It believes 2002 will be flat at best. However, the two research companies agree that global semiconductor revenues will fall 31 percent in 2001 to $141 billion. Lehman Brothers analyst Dan Niles believes SIA's forecast of 14 percent growth in Asia/Pacific is too optimistic given that the region has been the last to see the global downturn. The SIA said it expects Asia/Pacific to recover from a 23 percent decline this year and reach $45 billion next year, becoming the fastest-growing market over the next three years. Niles countered SIA's optimism by pointing out that PC growth rates in China are just starting to be revised lower along with GDP forecasts. Rich Templeton, executive VP and COO of Texas Instruments, said the industry is now paying the price for uncontrolled inventory growth at the annual SIA dinner in San Jose last Wednesday night. Other controversial aspects of the SIA's forecast are its prediction that 2003 will see growth of 21 percent to $181 billion and for chip revenues to further increase 21 percent in 2004 to $218 billion worldwide. In his report, Niles said the first quarter of 2002 would again see companies report seasonally down revenues despite many claiming the fourth quarter represents the bottom. Niles anticipates one further revision to SIA's 2002 estimates to be delivered in April. According to last week's forecast, the SIA believes DRAMs will remain a volatile market. The SIA expects global DRAM growth to reach 16 percent in 2002, ramping to $29 billion by 2004, with 44 percent growth in 2003 and 54 percent in 2004. Lehman Brothers' Niles said that the rates, although high, are certainly possible given the 60 percent drop to $12 million being seen this year and the huge cuts in capital expenditure that this will entail.

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