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 production was back by the end of the summer to within 2% of peak 2000 production. Production in the United States, which includes both part volume and more content per part, has been rising for six quarters, and is now 19% above year-ago output. Higher computer production — both parts count and content per part — has fueled this gain. U.S. computer production is 45% above the bottom of the recession two years ago. However, U.S. telecom production, stuck at the same level for a year, is not expected to pick up until late this year and then rise 6.8% in 2004.

IC production volume is expected to expand 18% by the end of 2004. This will progressively stress wafer start capacity causing both added capacity investment and higher product prices. Already, capacity constraints appeared in late summer for circuits predominately used in cell phones and cameras. The stronger demand trend is from the worldwide rise in economic growth that began a few months ago. The GDP growth rate has nearly doubled in the United States and Japan. Brief SARS recessions earlier this year in Canada, Korea and Taiwan have now ended, and the recessions caused by currency appreciation in Germany and Italy are now ending.