Electronics Industry Update

-- Semiconductor International, 10/1/1999

Worldwide Sales of Semiconductor Devices Historical Data: World Semiconductor Trade Statistics (WSTS) Forecast: Semiconductor International	Manufacturers' Shipments of Electronic Components Historical Data: U.S. Department of Commerce Forecast: Semiconductor International
Manufacturers' Shipments of Computers & Perhipheral Equipment Historical Data: U.S. Department of Commerce Forecast: Semiconductor International	Production Trends & Forecasts of Consumer Electronics Historical Data: U.S. Department of Commerce Forecast: Semiconductor International

The dollar value of total worldwide semiconductor sales increased by 17.5% between May and June, following a 3.7% gain the month before. For the first six months of 1999, the value of total chip sales increased 10.1% from the 1998 level. Unit sales volume also increased in June, up 11.6% from May. Worldwide unit sales through the first half of 1999 were 6.5% ahead of 1998.

The dollar value of shipments from U.S. manufacturers of computers and peripherals was $11.05 B in June, a drop of 4.2% from the downwardly revised May level. The value of June SIC 357 shipments was 1.3% lower than in June 1998. The value of orders placed this June was 4.7% lower than in May and 3.0% short of the June 1998 level.

The value of shipments from U.S. communications equipment manufacturers soared by 3.5% between May and June. June shipments were 19.1% stronger than during the same month last year, and total shipments over this year's second quarter were 20.6% higher than in the same three months of 1998. The 12-month moving total of SIC 366 shipments through June this year was expanding at a 13.6% annualized rate.

New Fab Activity Continues to Increase

Key points:

• Through the first six months of the year, the value of fab projects started in 1999 is 23% higher than in 1998 ($13.7B and $11.1B, respectively).
• By year-end, we expect the value of new fab projects started this year to exceed last year's level by 66% ($25B and $15B, respectively)
• Almost 60% of this new fab activity will be for greenfield (new fab) projects.
• Greenfield activity will be much stronger in the second half of this year compared to the first half.
• Foundries will account for 34% of all new fab projects this year -- more than memory fabs or logic fabs.

Strategic Marketing Associates is a market research company whose focus in on the fab. For information about capital spending and new fab projects, contact Strategic Marketing Associates at 831-464-2669