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To: Shumway who wrote (9564)	11/12/1998 3:46:00 AM
From: Shumway	Respond to of 93625

Chip Makers Expect Recovery, Growth By MARTHA MENDOZA AP Business Writer SAN JOSE, Calif. (AP) - Computer chip makers believe they have finally turned the corner after weathering three difficult years - the longest recession the semiconductor industry has seen. ''Overall the reason we keep trying is because when you look at the big picture, the market does in fact continue to cycle,'' said Steven Appleton, president of Boise, Idaho-based chip maker Micron Technology. Appleton spoke Wednesday as the Semiconductor Industry Association released a rosy forecast for the next three years. The presidents and CEOs of the top semiconductor companies in the country based their prediction on a variety of factors, including internal forecasts, orders, global economic reviews and analyst studies. Citing a surge in memory chips, microprocessors and digital signal processors, the association said it expects the entire global market to rebound. ''The semiconductor market is a $122 billion industry this year, but we should hit $182 billion by the year 2001,'' said Appleton. The forecast would mean a growth rate of 49 percent over the next three years. That's a huge improvement from the past three years, which have all been difficult on the industry. The group said 1998 will end down 10.9 percent, the first year since 1985 that the entire industry - not just specific product markets - declined in sales. Tom Engibous, president and CEO of Texas Instruments, said that despite the ups and downs, he is confident their industry will continue to thrive. ''The semiconductor industry is truly the driving force behind the high-technology revolution,'' he said. Semiconductor chips are the silicon pieces packed with circuits inside of computers. They make the computer process information, or ''think,'' as well as hold information in memory and communicate with other chips. Appleton cited several factors for this year's decline in sales. Primarily, the Asian economic crisis has hit the industry hard, he said. The Asia-Pacific semiconductor market is down 8.1 percent this year to $27.7 billion. However, the association said the Asia-Pacific market will recover during the next few years. By 2001 sales there are expected to surpass Europe, making it the second-strongest region with revenue reaching $43.9 billion. Another problem for the industry has been that some computer companies built up too much inventory and spent this year selling computers with older chips. Now they're ready to buy new chips for new computers, the association said. ''In 1999, the Semiconductor Industry Association will expand its successful efforts to increase the competitiveness of U.S. chip companies, knock down international trade barriers and foster technology programs to grow our industry,'' said association president George Scalise. Earlier this week Intel Corp. (Nasdaq:INTC - news) said surprisingly strong demand for personal computers that use its microprocessor chips will help the company exceed Wall Street forecasts for the fourth quarter.