Thread, a positive spin for chip makers - and hopefully investors. From biz.yahoo.com
Thursday October 30 6:12 PM EST
CORRECTED - Worldwide chip industry expected
In October 30, San Jose story, ''Worldwide chip industry expected to rebound in '98,'' in the first paragraph, read ''...will end 1997
with sluggish growth of 5.5 percent, reaching $139.1 billion...'' instead of ''...131.9 billion...'', (correcting figure). A corrected repetition
follows.
SAN JOSE, Calif., Oct 29 (Reuters) - The worldwide semiconductor industry will end 1997 with sluggish growth of 5.5 percent,
reaching $139.1 billion (corrects figure) in sales, but a rebound is expected next year, the Semiconductor Industry Association said in its
annual forecast.
''This year can be characterized by one word -- recovery -- and 1998 should be even better for the semiconductor industry,'' SIA
president George Scalise said in a statement.
This year the semiconductor industry was recouping from its first drop in sales in almost 10 years, due to a collapse of memory chips
prices and an ensuing inventory glut in 1996.
The SIA also said that, for the first time, its growth in 1997 was hampered by the stronger U.S. dollar against foreign currencies in
Europe and the Japanese yen.
Before the impact of the stronger dollar, the SIA said that 1997's growth rate would have been 10.4 percent.
''This is the first year in memory when currency fluctuations have had a demonstrable impact on dollar-based growth rates,'' the SIA
said.
In 1996, global chip sales fell 8.6 percent to $132 billion, the first drop in almost 10 years. Sales last fell in 1985, tumbling 30 percent
amid an industry recession.
The SIA said it is confident the industry's historical double-digit growth rates will return in 1998, 1999 and the year 2000, based on an
expectation that the memory chip market will rebound in 1998 and based on the ''world's fascination with electronic products.''
New growth in semiconductors will also come from continued expansion of the Internet and the development of new applications for
personal computers and other consumer electronic devices.
The SIA said its forecast is compiled by the top market researchers at 70 semiconductor companies.
In 1997, the SIA said microprocessor sales grew 27.6 percent and were the best-selling product, surpassing DRAM (dynamic random
access memory) chips in total sales. Intel Corp (INTC) is the world's biggest maker of microprocessors.
DRAMs are likely to regain the lead as the largest semiconductor product category in 2000, the SIA said.
Total sales of microprocessors rose to $23.6 billion in 1997, up from $18.5 billion in 1996. In 1998, processors will jump 20.4 percent
to total sales of $28.4 billion, then growth rates slow slightly, with 19.6 percent growth in 1999 to $34 billion and 19.3 percent growth in
2000 to $40.6 billion.
DRAM chips reached an all-time high of $40.8 billion in 1995, a surge of 74.4 percent, fueled by an explosion of sales in the PC
industry. Pricing collapsed in 1996, with sales sliding to $25.1 billion, a drop of 38.5 percent.
The inventory glut problems also carried over into 1997 and DRAM sales fell another 16.9 percent to $20.8 billion.
The SIA forecasts a return to growth in DRAMs throughout the rest of the decade. Sales are expected to increase 20 percent in 1998 to
$25 billion, 28.5 percent in 1999 to $32.2 billion and a 29.7 percent jump in 2000 to $41.7 billion.
Micron Technology (MU) is the largest U.S. DRAM maker.
Asia-Pacific continues to be the fastest growing semiconductor market, where sales increased 10.2 percent in 1997 to $30.3 billion.
Asia-Pacific represents 21.8 percent of all chip sales. In 2000, it will be 24.3 percent.
The Americas, which is dominated by the U.S. market, had a 9.7 percent increase to $46.8 billion. The Americas represents slightly
more than one-third of all global sales. In 1998, the region should see a jump of 17.2 percent to $54.9 billion.
Japan, hard hit by fluctuations in the yen, saw sales drop 1.9 percent in 1997, to $33.5 billion. Japan is 24.1 percent of the world
market. A dramatic turnaround is expected in 1998, where sales will increase 12.2 percent to $37.6 billion.
Europe, which is about 20.4 percent of the world market, saw its sales increase 3.2 percent in 1997, as sales reached $28.4 billion.
Next year, European sales should jump 17 percent and in 2000, chip sales in Europe are expected to reach a new high of $47.5 billion,
up 19.9 percent.
The SIA released its annual forecast Wednesday. |
