San Mateo County Times

Chip industry predicts boom
Wednesday June 09, 1999

By Liz Garone

REDWOOD CITY -- The continuing growth of the Internet will spur a long-awaited turnaround in the growth of semiconductor sales, according to a key semiconductor industry analyst.

The Semiconductor Industry Association is predicting a rise in global semiconductor sales of 12.1 percent this year after slow growth since 1995.

But that figure may be conservative, said Wilfred Corrigan, chairman and chief executive officer of LSI Logic, as the growth in the World Wide Web accelerates.

"The greatest growth driver of them all is the rapid public acceptance of the Internet," said Corrigan, at the SIA's annual meeting in Redwood City Tuesday.

Over the coming years an enormous level of business will be produced by the companies creating the content for the Internet, Corrigan explained.

"They are not going to be able to do that if there aren't any roadways to run on," he said.

T.J. Rogers, the outspoken president and CEO of San Jose-based Cypress Semiconductor, agreed.

"It looks like we're going to be paving the information superhighway with silicon for the next three years," Rogers said.

Worldwide semiconductor sales should total an estimated $140.8 billion in 1999, up from $125.6 billion in 1998.

The growth is expected to continue into 2000 with projected worldwide sales of $162.5 billion. By 2002, sales should reach more than $215 billion, according to SIA forecasts.

Digital signal processors and memory chips are leading the market's growth, Corrigan said.

North and South America will remain the world's largest semiconductor market, representing approximately one-third of chip revenues worldwide.

The Asia-Pacific market, excluding Japan, is expected to emerge from its recession to become the second-largest chip market, according to Corrigan. Europe is a close third, he said.

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