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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: ratan lal who wrote (13611)	12/20/1997 9:13:00 PM
From: Chi-X	Read Replies (1) \| Respond to of 70976

Good year ahead for chips? Despite all the bad vibes coming from the Far East, market researchers tell EE Times' Margaret Ryan that the semiconductor industry will do a lot better in '98 than in the two preceding years. They figure that South Korea's economic dive will force chip makers there to put fab-expansion plans on hold, easing overcapacity and stabilizing memory chip prices. Dataquest's Jim Handy says '98 IC sales will climb 16.7%, up from this year's 5.6% increase as IC-fab investments fall and DRAM prices rise. He expects global memory IC sales to grow to $39 billion, up 18% from '97's disastrous $33 billion. Vladi Catto, TI's economist, agrees. "We have a recovery in progress," he says, and it's going to benefit chip makers selling to wireless com, networking, and computer industries. He doesn't see Asia's problems hurting IC sales. Chip gear is another story But the semiconductor capital-equipment market could be a different story. It started softening in the last half of '97. After reports of Asia's financial troubles surfaced this fall, UBS Securities' Mark Fitzgerald lowered his projections for '98 equipment sales from 11% to zero growth. He believes the flat market will persist in '99. Dataquest's Ron Dornseif expects South Korean chip makers to trim capital spending 20% from '97 levels and the Japanese to cut their capital spending by 5% to 10%. On the plus side, he expects chip making gear sales to be flat to slightly up in Europe and up by as much as 10% in North America. These forecasts are in contrast to SEMI's, which at this point still expects 11.6% global growth in '98.