Early upturn in second-quarter 2002

JANUARY 21--Despite worldwide employment losses in the semiconductor industry, new economic data may suggest an upturn in the industry during the second quarter of 2002, according to Industrial Information Resources Inc.

Jan 21st, 2002

JANUARY 21--Despite worldwide employment losses in the semiconductor industry, new economic data may suggest an upturn in the industry during the second quarter of 2002, according to Industrial Information Resources Inc. (IIR; Houston, TX; www.industrialinfo.com), a provider of information in industrial markets. And according to the Semiconductor Billings Report, produced by the Semiconductor Industry Association (SIA), and Semiconductor Equipment and Materials International (SEMI) November 2001 global chip sales increased by 1.5%.

Typically, fourth-quarter sales are high, falling in line with the holiday season. Although fourth-quarter sales may still lag behind historical figures, any consecutive rise in semiconductor sales may indicate that a bottom has formed and a recovery may be near. Over the next few months, consumer demand will dictate whether or not the upswing in sales will continue.

Currently, the two biggest consumers of products relative to semiconductors are multinational corporations and telecommunications companies. It is estimated that global spending for hardware and software by consumers will reach $600 billion in 2002. Any further investments will be dictated by the future state of the economy.

As the year unfolds, semiconductor sales still remain in question, according to IIR. Capital spending for the industry is expected to be down. Some semiconductor manufacturers may continue to invest in process automation to stay ahead of the competition.

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