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Technology Stocks : MEMC INT'L. (WFR -NYSE) The Sleeping Giant? -- Ignore unavailable to you. Want to Upgrade?

To: steve susko who wrote (4181)	2/9/1999 2:25:00 PM
From: Link Lady	Read Replies (1) \| Respond to of 4697

news.com Semiconductor Group Expects Quicker Rebound: Bloomberg Forum Bloomberg News February 9, 1999, 10:47 a.m. PT Semiconductor Group Expects Quicker Rebound: Bloomberg Forum New York, Feb. 9 (Bloomberg) - The recovery from the two- year slump in computer chip sales seems to be accelerating because of demand for new personal computers, said George M. Scalise, president of the Semiconductor Industry Association. ''Momentum appears to be building in the right direction,'' he told the Bloomberg Forum. Investors should wait for first- quarter sales statistics to bear that out, Scalise said. In the fourth quarter last year, worldwide chip sales increased ''about 10 percent'' over the third quarter, when predictions had been ''somewhere in the vicinity of 2 percent to 3 percent,'' the trade association head said. While Scalise declined to make a prediction, he said members of the San Jose, California-based group believe ''we continue to make progress'' from the slump that began in 1997. The industry's average monthly sales for December rose to $11.31 billion from $10.23 billion a year earlier. Global demand for semiconductors eased in the fourth quarter of 1996 and extended throughout 1997 as Asian economies slumped, which crimped demand from high-volume customers and led to over production by manufacturers. Computer makers have trimmed inventories since then and began work on a new generation of products, helping to revive demand. ''The No. 1 trend is the PC,'' said Scalise, 64, who served as chief operating officer of Apple Computer Inc., following various positions at National Semiconductor Corp., Maxtor Corp., Advanced Micro Devices Inc., Motorola Inc. and Fairchild Semiconductor Corp. PC sales this year should rise nearly 25 percent, to about 117 million, he said. ''This will be the first year when over 100 million units are sold,'' he added. Information Technology One reason propelling sales is growing demand for Internet access, Scalise said. ''Communications and computers - what we call information technology - consumes about 65 percent of sales,'' he said. The semiconductor industry supplies most of the devices incorporated in computers, from microprocessors to memory chips, as well as digital signal processors and communications chips that provide Internet access. The remaining demand is for chips used in consumer electronics, automobiles, appliances and industrial products, said Scalise. Electronic content in those products ''is growing all the time.'' U.S. semiconductor makers appear to be well-positioned against international rivals, especially Japanese, Scalise said, because they appear to be most advanced in computer and communications technologies that are in greatest demand. As recently as 1992, consumer electronics accounted for as much as 28 percent of chip demand. Last year the percentage fell to around 16 percent. Japanese chip makers, from Sony Corp. to NEC Corp., are all consumer electronics giants. Still, Scalise said South Korean rivals like Samsung Electronics Corp. and Hyundai Electronics Corp., appear to be recovering. Other Asian manufacturers may also benefit from restructuring and resume challenging U.S. chipmakers. ''I wouldn't count anyone out - ever,'' Scalise said. The trade group official also predicted that average chip prices will continue to fall about 30 percent annually, as they have for 50 years. ''That has been part of the way we have driven demand for products, part of the way we have generated volume to bring out the next generation of products,'' he said.