Electronics Industry Update
-- Semiconductor International, 7/1/1999
| Worldwide Sales of Semiconductor Devices  |
Production Trends, Forecasts of Electronic Components  |
| Production Trends, Forecasts of Computers  |
Production Trends and
Forecasts, Consumer Electronics  |
Output from the nation's communications equipment industry increased by a strong 1.7% between February and March of this year, the best monthly gain since June 1998. Following the production declines recorded over the final three months of last year, and the only marginal improvement registered in the first two months of this year, the magnitude of this bounce-back is both welcome and unanticipated. It appears the industry has turned the corner.
Industrial production in the electronic components industry group rose by a
very strong 2.1% between February and March, although there were some downward
revisions in the output gains originally estimated for January and February.
Electronic components' output during the first quarter of this year was up an
estimated 26.7% from its January-March 1998 level. Total production for the past
twelve months is running 24.5% ahead of production gains recorded in the
previous twelve months. This is the lowest annual growth rate that we've seen
for the components industry in almost 5 years. 
New Fab Activity Moves
Up
Key points:
- The value of new fab projects, excluding upgrades, in the first quarter of this year was over $4 B.
- The value of upgrades started in the first quarter was $5 B.
- The upswing in new fab starts, excluding upgrades, is continuing. By May 1999, new fab starts had risen by 50% over March.
- New fab announcements (future fab plans) are at their highest level since September and over 3X their January 1999 level.
- Almost 30 of all new fab spending will be for foundries.
- New fab project spending for 1999 will be up 30% over 1998.
