To: Dale Knipschield who wrote (40792 ) 12/14/2000 11:24:06 AM From: Proud_Infidel Read Replies (1) | Respond to of 70976 IC market to grow 25% to 30% in 2001, says leading economist By Mark LaPedus Semiconductor Business News (12/14/00 08:10 a.m. PST) SEDONA, Ariz. -- There will be some good and bad news for chip suppliers and semiconductor equipment makers in 2001, according to a leading economist at a large IC maker. On the positive side, the worldwide IC industry is projected to grow at a respectable 25% to 30% in 2001, said Jean-Phillipe Dauvin, group vice president and chief economist at STMicroelectronics Inc., at a technology conference sponsored by the company here earlier this week. "The current forecasts [for the worldwide IC market] are running between 10% to 25% or 27% growth for next year," Dauvin said in a presentation. "We could see somewhat between 25% to 30% growth next year, perhaps 27%." On the other hand, capital expenditures are projected to slow to a crawl. "We could see a slowdown in capital expenditures next year," Dauvin said in an interview with SBN. "We could see only 5% to 10% growth in terms of capital expenditures." That pales in comparison to 2000. In total, capital expenditures in the semiconductor industry are projected to hit $55 billion in 2000, a 65% increase over the like period a year ago, he said. Still, the ST executive remains upbeat about industry for 2001, thanks in part to exploding demand for cellular phones, networking equipment, set-top boxes, and other products. "We even expect a rebound in PCs," he said. One of the key drivers is communications. In total, the worldwide communications chip market will grow from $32 billion in 1999, to $85 billion by 2004, according to ST. A key sector in this arena is wireless handsets. In total, the worldwide market for handsets will grow from 285 million units in 1999, to 435 million in 2000, according to IC Insights. "We forecast strong growth in this market," Dauvin said. "We could see 600 million units being shipped in 2001. That's the upper end of the projection." Other key markets for growth include broadband, networking infrastructure equipment, and set-top boxes, he said.