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To: Donald Wennerstrom who wrote (4345)	10/1/2000 7:57:26 PM
From: Demosthenes	Respond to of 5867

Donald, Thanks. D

To: Donald Wennerstrom who wrote (4345)	10/2/2000 10:37:38 AM
From: Proud_Infidel	Read Replies (1) \| Respond to of 5867

Donald, Excellent article. Thanks alot. If analysts predicting the end of the cycle are correct, "it will be more by luck than database," Bagley commented, arguing that the semiconductor industry is driven by so many different factors now, and it is not completely dependent on cell phones or any specific product. The industry was driven by PC growth in the 1980s and 1990s, and by mainframe computers and the military in earlier years, but that narrowness of demand is not evident now. Bagley estimated the cell-phone market for semiconductors is now worth about $17 billion a year, representing roughly 8 percent of the global semiconductor market. "Seventeen billion dollars is a lot," Bagley said. "But if you look at the scope (of the global semiconductor industry), it's a big market. You don't take 6 to 7 percent and drive the industry." When you add up all forms of communication, including Internet infrastructure, and what Bagley called "information manipulation and information transmission," that would represent about 80 percent of the global semiconductor market, he said.

To: Donald Wennerstrom who wrote (4345)	10/3/2000 4:53:55 PM
From: Proud_Infidel	Respond to of 5867

FSA raises wafer demand forecast for 2000 and 2001, but can foundries keep up? Semiconductor Business News (10/03/00, 04:32:52 PM EDT) SAN JOSE - The Fabless Semiconductor Association (FSA) here today raised its forecast for silicon wafer demand for both 2001 and 2002, but analysts wonder if there is enough worldwide foundry capacity to meet this surge in business. Citing strong growth in the communications and other sectors, fabless-IC companies in total are projected to consume 54% more wafers in 2000 than in 1999, according to the FSA's new mid-year forecast released today. In early projections, the FSA predicted that fabless-IC companies in total would consume 39% more silicon wafers in 2000 over last year. The FSA also raised its wafer-demand forecast in 2001. Originally, the FSA projected that fabless-chip companies would consume 42% more wafers in 2001 than in 2000. But now, the trade organization projects that fabless-chip makers will consume 55% more wafers next year than in 2000. "Growth for the fabless segment has not eased this year and we have no expectations of a slow down in 2001," stated Jodi Shelton, executive director of the FSA. "The FSA's biggest concern is that a wafer capacity shortage could stagnate this growth and, consequently, innovations," Shelton said. "Therefore, we continue to encourage the development of new foundry start-ups and expansions by existing foundry partners to support the capacity requirements of this business model." Analysts agreed. "The overall semiconductor industry is expected to grow close to 35% this year over 1999 and the fabless companies will continue to grow faster," said Mark Edelstone, who tracks the industry for Morgan Stanley Dean Witter in San Francisco. "The driver for fabless company growth in the second half of 2000 is seasonally strong PC and consumer electronics demand combined with the ongoing strength in the wireless and data communications markets," he said. "However, capacity constraints will remain in force and fabless semiconductor companies will need to plan ahead in order to ensure a steady supply of wafer capacity in the second half of the year."