Electronics Industry Update

Worldwide Sales of Semiconductor Devices	Manufacturers' Shipments of Electronic Components
Manufacturers' Shipments of Computers	Manufacturers' Shipments of Communications Equipment

Semiconductor sales are expected to increase 11.4% this year and 24.1% in 2004. Next year's outlook is higher than the 16.8% gain forecast in the spring by the SIA. The SARS problem is apparently over, postwar business and consumer confidence has rebounded quickly and substantial tax and credit cost cuts have occurred in the United States and Europe. The major impact will be on prices, mostly for commodity chips and for leading-edge circuits run at capacity-short foundries.

Computer shipments have risen quickly in the spring with sales from U.S. factories up at a 30% plus annual rate. Full-year U.S. shipments are expected to be 9.1% higher with a 10.4% further gain expected in 2004. However, telecom shipments have not yet shown sustained growth beyond the initial rebound after the worst of the inventory problem was corrected. Shipments from U.S. factories have been stuck at the same depressed level for almost a year. U.S. shipments are expected to decline 5.2% this year and then surge 16.4% in 2004. The stronger economy contributes, but most of the gain results from the carrier and consumer equipment needs to implement new wireless telephone features. Component sales will rise slightly less than the key end markets.