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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (35382)	5/25/2000 11:49:00 AM
From: Proud_Infidel	Read Replies (2) \| Respond to of 70976

STM sees 2000 global chip mkt worth $200 bln (UPDATE: Adds more interview details, share price, background) By Sophie Walker PARIS, May 25 (Reuters) - French-Italian chipmaker STMicroelectronics forecast on Thursday that the global semiconductor market would expand by 30 percent in 2000 and could even reach growth of 34 or 35 percent. ``I have revised my forecast (from 25 percent) to 30 percent in 2000, but it could reach 34 to 35 percent, which would represent $200 billion,'' STM chief economist Jean-Philippe Dauvin told Reuters in an interview. He said that 30 percent growth in the global semiconductor market would represent $195 billion, adding that the primary sectors pulling the market were telecommunications and digital consumer products. Dauvin said the digital consumer sector would grow 60 percent in 2000, while telecoms would grow 40 percent and personal computers 30 percent. ``I am forecasting 50 million set-top sets in 2000, against 35 million in 1999, and 13 million DVD (digital video disk) shipments against six million in 1999,'' Dauvin said. ``I estimate these new components of growth will have 24 percent relative share of the total market in 2000, rising to 40 percent minimum in 2004/5 and clearly outpassing the size of the PC-driven semiconductor market,'' he added. Dauvin forecast the market for ``flash'' memory chips, a key component in cellphones, would grow 160 percent in 2000, adding that growth in 2001 would again be ``three digit, or very close''. The smartcard market was expected to grow 40 percent this year, he added. Dauvin said that despite companies boosting their production spending, the semiconductor market would remain at undercapacity in 2000 and 2001. ``In order to supply demand in the years 2000 and 2001, we need at least 29 new fabs (fabrication plants) globally. In 2000 there will be not more than 16 and in 2001 not more than 16 too,'' Dauvin said. ``It takes at least 25 to 28 months to produce wafers from the moment you start digging a hole in the ground and the industry only started to order fabs at the beginning of the year 2000. There is clearly an undercapacity in all areas of the market,'' he said. Shares in STMicroelectronics closed 7.76 percent higher at 62.50 euros, off their high of 63.8, boosted also by Wednesday's news that Intel Corp (NasdaqNM:INTC - news) planned to spend $2 billion to boost production. Intel's president and chief executive officer Craig Barrett said on Thursday he expected a short supply in the industry for another 12 months as components run short. STM said earlier this year it planned an outlay of some $2.5 billion in capital investment to meet surging demand, adding that it expected to outstrip market growth.