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To: Donald Wennerstrom who wrote (88)	11/2/2000 10:08:19 AM
From: Donald Wennerstrom	Respond to of 95761

Executives say SIA is right in forecasting no downturn in next three years By J. Robert Lineback, Semiconductor Business News Nov 2, 2000 (6:41 AM) URL: semibiznews.com SAN JOSE -- Top semiconductor executives here at press conference on Wednesday evening said they were completely comfortable and satisfied with a new industry consensus forecast that shows no real downturn in chip sales during the next three years and only a modest slowdown in revenue growth in the 2002 timeframe. "I think the industry is going to have a wind at its back for the next several years," assessed Jerry Sanders, chairman and CEO of Advanced Micro Devices Inc. During the press conference to release the annual forecast from the Semiconductor Industry Association, Sanders also blasted the "jerks" and "idiots" who he says have confused slowing growth rates with the peaking of revenues. The AMD chief executive chided the press, Wall Street investors, and a number of industry observers for confusing growth rates with chip revenue totals, and he said the real problem has been managing expectations in the current boom cycle. "I think the semiconductor industry is about a year-and-a-half into what should be a four-year cycle," added Sanders, refuting some warnings that growth and revenues will hit a slump in 2001 or 2002 due to an over buildup of production capacity. The SIA's new U.S. industry consensus forecast sets expectations for worldwide semiconductor growth at 37% in 2000, 22% in 2001, 10% in 2002, and 16% in 2003. Released on Wednesday, the SIA forecast shows chip sales growing from $205 billion this year to $319 billion in 2003 (see Nov. 1 story). The new SIA forecast shows flash memories being the fastest growing segment in 2000, jumping 130% to $10 billion, and continuing its climb in 2001 with a 44% increase to $15 billion. (See table below for breakout of segments.) AMD's Sanders jumped on other industry forecasts that show flash fizzling out. "As recently as May, the [SIA] forecast for flash memories--four years out--was $14.5 billion," Sanders said, referring to the 1999 mid-year update released in June. The new SIA forecast ups the flash projection to $23 in 2003. "We have seen the flash demand explode... but right now classic wisdom, or what I call 'conventional wisdom,' is that flash is trash," Sanders complained. "So any one in the flash business is getting their stocks hammered." AMD claims to be the world's largest flash memory supplier with 31% share, followed by Intel with 26%. "We think the flash market is going to be limited by supply," Sanders told the press conference. "The question is at what rate are we going to grow. I figure anyone in the flash business is going to be in pretty good shape for the next several years." Other Silicon Valley executives also said they are also confident that the chip industry will not suffer a repeat of a recession similar to the three-year slump in the late 1990s. The buildup of new communications infrastructures for broadband Internet access, data and voice convergence and wireless systems were all cited as being a key factor in filling in potential potholes in the next several years. "What is really changing the amplitude of cyclicality is the fact communications is the driver today, which will tend to mute any slowdowns," said Wilf Corrigan, president and chief executive officer of LSI Logic Corp. "There will still be cycles. But it is just that the amplitude of the cycles will be muted somewhat," he added during the SIA forecast press conference. "We expect that [muted slowdown] to happen somewhere around 2002--it might be a little later than that but until 2002, I don't think we see that [overall growth rates] substantial slowing," said the LSI Logic chief executive. Pricing of products is another factor that will determine how quickly the industry grows in the 2002-2003 timeframe, noted executives during the press conference. DRAM prices recently have been driven lower in recent weeks, eroding revenue growth in that segment. The problem there has been expectations for stronger PC sales in the final months of 2000, and system makers are adjusting their inventories, said Steve Appleton, chairman, CEO and president of Micron Technology Inc. Appleton said the industry has not seen the level of capacity build up that was underway in 1995 and 1996, which created a major glut of DRAMs and other products in the late 1990s. "What we are experiencing today is some moderating of some growth rates in various sectors, but in general the supply base has just not seen the kind of growth that has typically created the kind of downturns that we have witnessed in the past," said Appleton. SIA chip forecast by regions Product segments 2000 2001 2002 2003 Analog $31 billion (+39%) $37 billion (+20%) $40 billion (+10%) $47 billion (+15%) DRAM $31 billion (+48%) $41 billion (+34%) $43 billion (+5%) $52 billion (+21%) Flash $10 billion (+130%) $15 billion (+44%) $18 billion (+21%) $23 billion (+24%) Logic ICs $34 billion (+48%) $43 billion (+26%) $49 billion (+13%) $56 billion (+13%) Microprocessors $30 billion (+11%) $32 billion (+6%) $35 billion (+11%) $39 billion (+10%) Microcontrollers $19 billion (+35%) $24 billion (+25%) $27 billion (+13%) $34 billion (+29%) Discretes $18 billion (+31%) $20 billion (+13%) $21 billion (+4%) $22 billion (+7%) Optoelectronics $10 billion (+68%) $13 billion (+30%) $15 billion (+19%) $19 billion (+28%)

To: Donald Wennerstrom who wrote (88)	11/2/2000 10:17:13 AM
From: Donald Wennerstrom	Read Replies (1) \| Respond to of 95761

Intel remains bullish on growth, gives mixed reviews on Rambus efforts By Mark LaPedus, Semiconductor Business News Nov 1, 2000 (3:57 PM) URL: semibiznews.com SANTA CLARA, Calif. -- During a live Webcast today, Intel Corp. gave an update on its recent financial performance and product strategies, including its problems with Rambus Inc. and bold plans for the Pentium 4 processor. And after reporting lackluster results in the third quarter, Intel also attempted to ease fears that its business is slowing down. "We're bullish," declared Craig Barrett, president and chief executive of Intel during the Webcast. "We're bullish about our core products. I expect our communications will grow by 50% a year." But it seemed that the Santa Clara company could not make up its mind if Rambus was a friend or foe. Taking another shot at Rambus in the media, Intel blamed an assortment of product delays and problems during the year on an inability to bring the costs down for the much-troubled Direct Rambus DRAM memory architecture. "One of our problems was RDRAMs," said Paul Otellini, executive vice president and general manager of the Intel Architecture Group, during the Webcast, referring to the Rambus' high-speed memory chips. In fact, Rambus was unable to bring up its memory-chip technologies "at acceptable price points and volumes," Otellini said. On the other hand, Intel is bullish on its yet-to-be-introduced Pentium 4 processor, a high-end chip that works in conjunction with only RDRAM-based memories, Otellini said. "We will ramp up [the Pentium 4] this quarter," he said. The 1.4-GHz Pentium 4, to be introduced this month, is geared for the high-end desktop computer business. But by early 2002, the company will attempt to bring the chip into the mainstream desktop market, which is where the company's Pentium III processor is positioned, he said. "We will try to accelerate that," he added. In general, Intel remains upbeat. "PC sales are brisk," said Sean Maloney, senior vice president and director of sales and marketing for Intel. "Outside of the PC market, we have seen strong growth for our servers and communications products." The company is also beginning to see a slight uptick in Europe, which had been a source spot for the company. Recently, in fact, Intel blamed its lackluster third-quarter results due to weak demand in Europe. "As you all are aware, Europe was disappointing in the third quarter," Maloney said. "But we are starting well in Europe [in the fourth quarter]." Intel is also experiencing brisk demand for PC and other products in Asia, especially in Japan, he added.