Addi,
Re:
Semiconductor group sees global sales off 1.8 percent
(adds Daley statement)
By Kourosh Karimkhany
PALO ALTO, Calif, June 3 (Reuters) - Global sales of computer chips will decrease 1.8 percent to $134.6 billion in 1998
largely because of Asia's serious economic troubles, the Semiconductor Industry Association said on Wednesday.
In addition to Asia, the industry is facing falling prices for semiconductor products, a glut of computer memory chips and
slowing demand for personal computers. The pricing pressures are hurting sales even in regions with strong economies.
In the Americas, for example, chip sales likely will fall about $3 billion from last year's $45.8 billion total because of pricing
pressures, the industry's main trade group said.
''The financial turbulence in Asia and other market changes has crimped the expected expansion of global chip markets in early
1998,'' SIA President George Scalise said in a statement.
Recent news from major semiconductor companies backs up the forecasts. National Semiconductor Corp. (NSM - news)
plans to lay off 1,400 people. Intel Corp. (INTC - news), the world's biggest chipmaker, expects flat revenue for the year and
will eliminate 3,000 jobs through attrition, and Applied Materials Inc. (AMAT - news), the biggest equipment supplier to the
industry, is offering voluntary severance packages to cut costs.
The SIA and other forecasters had expected chip sales to grow in 1998 after a lackluster 1997. But the industry had a huge
sales drop in the first quarter because of weak Asian currencies, slowing purchases by personal computer makers and falling
component prices.
First-quarter revenue declined 10.2 percent in the Americas, 4.9 percent in Europe, 11.5 percent in Japan and 9.7 percent in
Asia, according to the SIA.
Sales are improving in the second quarter, but not at a fast enough rate to offset the reduced orders in the previous quarter, the
SIA said.
In Washington, Commerce Secretary William Daly announced that the foreign share of the Japanese semiconductor market
grew a record 5.8 percentage points in 1997, allowing foreign chipmakers to sell over $9 billion of semiconductors in Japan.
It was the largest year-to-year growth since implementation of the U.S.-Japan semiconductor agreement, which aimed at
expanding foreign access to Japan's markets.
The SIA also gave forecasts for specific industry segments:
-- Sales of computer memory chips, known as DRAMS, are expected to drop 26.6 percent in 1998 to $14.5 billion. A huge
worldwide glut, now in its third year, is expected to dissipate late in 1998.
-- The increasing popularity of PCs that cost less than $1,000 will force microprocessor prices lower. Microprocessor sales
are expected to be about the same they were in 1996, about $23.4 billion with 42 percent of all sales coming from the
Americas.
-- Digital Signal Processor, used in consumer electronics and telecommunication gear, will continue to grow rapidly. Sales are
expected to rise 23 percent in 1998 to $3.9 billion.
-- Geographically, Asia will be the weakest performer. Asia Pacific, which had been the hottest emerging sales market, will
grow just 2.8 percent to $31.0 billion this year, after growing 9.6 percent in 1997.
-- Europe will show the best gains, with sales increasing 5 percent to $30.5 billion by year end. In the Americas, sales will
decrease 4.1 percent to $43.9 billion. In Japan, sales will fall 9.2 percent to $29.1 billion.
Still, the SIA expects strong demand for access to the Internet to get semiconductor sales growing again by the second half of
the year and for the next few years.
Global sales will increase 17.2 percent in 1999 to $157.7 billion, 18.5 percent in 2000 to $187 billion, and 18.9 percent in
2001 to $222.3 billion, the SIA said.
biz.yahoo.com
You know this -1.8% article seems really positive for LSI, in a sense, if you read between the lines.
All of these geographical areas are showing negative semiconductor revenue growth for the first quarter (-5-10%), but if I'm remembering right, LSI's 1st quarter revenue *increased* year over year. Now if the whole year is going to be down only 1.8% but that represents a comeback from a terrible first quarter (in which LSI actually grew!), then that seems to make the case that LSI has been the baby thrown out with the semiconductor bathwater.
Maybe I'm just desperate to find a silver lining here...
Andy |
