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To: tech101 who wrote (707)	6/8/2000 12:35:00 PM
From: tech101	Read Replies (1) \| Respond to of 1056

SIA hikes chip growth forecast to 31% and $195 billion in 2000 By J. Robert Lineback Semiconductor Business News (06/07/00, 05:11:57 PM EDT) REDWOOD CITY, Calif. -- Chip sales are growing much stronger than expected this year, causing the Semiconductor Industry Association to raise its year 2000 revenue forecast to $195 billion from a previous estimate of $174 billion. The SIA today said it now expects worldwide semiconductor sales to grow 31% in 2000 over last year's $144 billion total. In releasing its mid-year forecast, the U.S. trade group also predicted that chip sales would continue strong growth in 2001, rising 25% to $244 billion, followed by a 14% increase to $279 billion in 2002. In 2003, chip sales are now expected to reach $312 billion, a 12% increase over 2000 revenues, according to the SIA Mid-Year Forecast, which was released during an industry luncheon in Redwood City. The SIA's new forecast comes after a number of market analysts hiked their estimates for sales growth in 2000. At the start of 2000, most chip analysts were originally forecasting sales growth of 18-25%, but now many have hiked their projections to above 30%. Likewise, the SIA had predicted 21% growth in 2000 chip sales last fall, but stronger-than-expected demand for ICs in communications and shortages of some components--especially flash memories--have pushed up revenues much higher in the first five months of this year. The current growth cycle from the 1996-1998 slump marks the first time that communications applications have fueled a strong recovery in semiconductor revenues, said John Dickson, executive vice president and CEO of Lucent Technologies Inc.'s Microelectronics and Communications Technologies unit. Dickson presented the mid-year forecast during the SIA's lucheon today. Underscoring the strength of communications applications is the SIA's forecast for analog chip growth. The global market for analog semiconductors is expected to grow 50% during the next four years. The mid-year forecast said analog revenues will increase 35% to $30 billion in 2000, followed by 23% growth to $36 billion in 2001. In 2002, analog chip sales are expected to rise 17% to $43 billion, followed by an 11% growth in 2003 to $48 billion. The troubled DRAM business is also expected to see strong growth in the next couple of years. The SIA now predicts that DRAM sales will increase 42% to $29 billion in 2000, followed by a 44% increase to $42 billion in 2001. If so, DRAM sales will finally surpass the total in 1995, which was about $41 billion. However, the SIA is predicting a significant slowdown in DRAM growth in 2002. Revenues in that memory segment will increase by only 5% to $44 billion, followed by 13% growth to $50 billion in 2003. Flash memory sales continue to surge because of demand in telecommunication products and shortages, which have pushed up average selling prices since last year. In 2000, flash sales are now expected to grow 116% to $9.9 billion, followed by an increase of 34% to $13 billion in 2001. But the sales growth will slow to 9% in 2002, pushing flash revenues to the $14 billion mark, said the new SIA forecast. In 2003, flash sales are expected to nudge upwards by just 1% to about $15 billion, according to the SIA. Chip revenues are expected to grow the strongest in the Asia Pacific market (excluding Japan) and in Europe, according to the new forecast. Asia Pacific chip sales will jump 38% to $51 billion, followed by a 29% increase to $66 billion in 2001, predicted the SIA. European semiconductor sales will grow 32% to $42 billion in 2000, followed by an increase of 25% to $52 billion in 2001. Semiconductor sales in the Americas are expected to grow 24% to $59 billion in 2000 and 24% to $73 billion in 2001. Japan's semiconductor revenues will increase 31% to $43 billion this year, followed by 22% growth to $53 billion in 2001, according to the SIA mid-year forecast. Semiconductor growth by region: Region 2000 2001 2002 2003 Americas $59 billion $73 billion $83 billion $92 billion Europe $42 billion $52 billion $59 billion $66 billion Japan $43 billion $53 billion $59 billion $66 billion Asia Pacific $51 billion $66 billion $77 billion $88 billion Source: SIA Mid-Year Forecast semibiznews.com