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To: Tony Viola who wrote (141622)	8/14/2001 9:21:05 PM
From: puborectalis	Respond to of 186894

10 good (or bad) reasons why 2001 is worst chip year ever Semiconductor Business News (08/14/01 15:22 p.m. EST) SCOTTSDALE, Ariz. -- In case it's not clear yet that 2001 has been a disaster for the chip industry, here is IC Insight Inc.'s Top 10 reasons to be thankful that the year has past its halfway point. Only 138 days to go! This list comes from the market research firm's mid-year update report, which will soon be released. 1.Worldwide GDP growth in 2001 is expected to be only 2.4%, which would qualify this year as a "mild global recession." IC Insights said a global recession in 2001 would constitute the shortest interval (three years) between worldwide recessions in the last 30 years. Since 1970, previous global recessions have typically been seven-to-nine years apart, noted the IC research firm. 2.For the first time on record, worldwide electronic system sales are forecast to decline 4% in 2001, said IC Insights. The previous record low-growth year for worldwide electronic system sales was in 1998 at an increase of 1%, according to the firm. 3. In 2001, the worldwide semiconductor market is expected to register its largest decline in history: a drop of 26%. IC Insights noted that this projected drop outpaces the 17% decline in 1985--until now, the worst year ever for the chip industry. 4.This year, integrated circuit unit volume shipments are expected to tie the worst decline ever, which was set in 1985 at minus 16%. 5.The "Perfect Storm" combination of global recession, overcapacity, and inventory burn will cause the current IC industry cycle (1999-2001) to experience an average annual growth rate of only 9% vs. 16% previous cycle (1993-1998). 6.The Americas' semiconductor market is forecast to register its worst decline in history this year--a 39% decline, according to IC Insights. The previous record drop was in 1985 with a decline of 30%, said the research firm. 7.For the first time ever, the ROW (rest-of-world) region in 2001 is forecast to be the largest semiconductor market in the world, displacing the Americas region from the No.1 ranking. The ROW semiconductor market's number one ranking in 2001 will be primarily due to the strength of the Chinese market, noted IC Insights. (In fact, China is the only major country in the world expected to show positive semiconductor market growth at an increase of 5% in 2001 over last year.) 8.Look for semiconductor capital spending to decline by a record 30% in 2001, said IC Insights. This will surpass the previous record decline of 25% in 1998, the firm added. 9.The DRAM industry is forecast to show its second-largest decline ever with a 53% drop in dollar revenues, according to IC Insights. Only the decline in 1985 (minus 56%) was worse, noted the Scottsdale-based firm. (This year the DRAM market will only be about one-third the size it registered in 1995--$13.5 billion vs. $41 billion.) 10.The IC foundry business--led by the likes of TSMC, UMC, and Chartered Semiconductor--is expected to plunge at its steepest decline ever with revenues off 32% from 2000, said IC Insights. Foundry fab capacity utilization will average an all-time low of just 54% in 2001 vs. 97% in 2000, said the mid-year report. IC Insights said 2002 will be better for the semiconductor industry. Chip revenues are expected to grow 14% from 2001 and electronics sales will be up 5% from this year.