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To: E. Graphs who wrote (18774)	6/10/1999 10:56:00 AM
From: Moonray	Read Replies (1) \| Respond to of 25814

More, Sacramento Bee version: Computer Chip Industry Mini-Recession Ending, Report Says Jun. 9 (The Sacramento Bee/KRTBN)--REDWOOD CITY, Calif.--A three-year mini-recession in the semiconductor industry is ending and boom times are ahead for chip-makers like Intel Corp., an industry group predicted Tuesday. "We finally have some good news," Cypress Semiconductor President T.J. Rodgers told members of the Semiconductor Industry Association. "Winter is over, and spring is upon us." Sales of semiconductors -- which are critical to millions of devices from computers to cameras -- are expected to grow 12.1 percent this year to $141 billion, according to projections by association members. That trend, in part due to the growth of the Internet, will continue with sales reaching $163 billion in 2000 and $191 billion in 2001, according to San Jose-based SIA. The positive outlook is welcome news to industry leaders like Intel Corp., which employs about 5,000 engineers, sales and information technology workers in Folsom. The semiconductor industry's fortunes took a downturn beginning in 1996. Chip sales slipped from $132 billion that year to $126 billion in 1998. Wilfred Corrigan, chairman of chip maker LSI Logic, attributed the slowdown to several factors, including computer makers reducing their inventory of chips, the Asian economic crisis and production that exceeded demand. Now the tables have turned, ending the unprecedented downturn in the industry, Corrigan said, adding that 1999 "will be the first double-digit growth year since the 41.7 percent spurt in 1995." The growth of the Internet has become the leading driver for semiconductor sales recovery, SIA said. The "plumbing" of the World Wide Web, things like routers and switches, all require semiconductors. One subset of semiconductors, microprocessors, is expected to become one of the fastest-growing categories. In five years, the market for microprocessors, the "brains" inside computers, is expected to nearly double from $23 billion in 1997 to $45 billion in 2002. This is a significant trend for Intel, the No. 1 manufacturer of microprocessors. Analysts estimate the Santa Clara-based company's chips power about 85 percent of personal computers. Even as members of the SIA reveled in the good news, they acknowledged that their fortunes likely will be fleeting. The industry historically has been cyclical, responding to advances in technology and consumer demand for high-tech gadgetry. "Will there be another downturn? Yes, I guarantee it," said Corrigan. "So, in the meantime, let's make the most of the upturn." o~~~ O