Electronics Industry Update

Worldwide Sales of Semiconductor Devices	Production Trends & Forecasts of Electronic Components
Production Trends & Forecasts of Computers	Production Trends & Forecasts of Consumer Electronics

Worldwide IC unit volume production was up 6.4% in May, recovering from the war-related investment caution earlier in the year. Unit production was 50% above the low point in January 2002, but still 16% short of peak production in September 2000. Production in the United States, which includes both part volume and more content per part, has been rising for five quarters and is now 18% above year-ago output. This gain has been fueled by higher computer production — both parts count and content per part — that is 22% higher than a year earlier. However, U.S. telecom production is still slipping slightly, adding to the one-third decline since late 2000.

World economic growth outside the United States slowed to a 1-1.5% pace in the spring, the slowest since the 2001 recession, but an improving trend is evident in May and June. The result will be continued strong growth in the computer market, a return to growth in telecom equipment by year end, and accelerating improvement in other semiconductor end markets. This is expected to push IC production ~17% higher by the end of next year, absorbing all of the added wafer production capacity now being developed and raising average selling prices (ASPs) for ICs.