Dataquest Reports Worldwide Semiconductor Market to Drop 9 Percent in 1996; New Forecast Shows the Market Will Rebound in 1997.

SAN JOSE, Calif.--(BUSINESS WIRE)--Oct. 15, 1996--The worldwide semiconductor market is on pace to have revenue reach $137 billion this year, which is down more than 9 percent over last year's revenue, according to Dataquest.

Earlier this year Dataquest forecast the market to grow just 7.6 percent after 37 percent growth in 1995, but the severity of the slowdown exceeded Dataquest's expectations. While the market has taken a negative slide, Dataquest analysts think the worst is over.

"Although end-equipment markets slowed in 1996, the major causes of the decline were excess inventories, excess capacity, a DRAM price collapse, and a weakening yen," said Gary Grandbois, vice president and chief analyst in Dataquest's Semiconductors Worldwide program. "With the end-equipment markets firming up in 1997 and an end to the memory price slide, we expect 1997 to be a growth year for the industry."

In 1995, all regions showed revenue growth exceeding 35 percent. All of the regions are in synch again in 1996, although this year they will all suffer large revenue declines. Japan will see the largest decline in 1996 because the yen-to-dollar exchange rate continues to decline rapidly as compared to 1995. -0-

Total Semiconductor Consumption Forecast by Region
(Millions of U.S. Dollars)

Region             1995     1996     1997     1998     1999     2000

Americas          48,349   44,177   50,440   62,330   79,222   97,714
Japan             42,164   36,574   40,476   48,368   58,842   70,483
Europe/Middle East/
 Africa           28,341   27,136   29,642   34,951   42,225   53,099
Asia/Pacific      32,417   29,090   34,047   43,273   54,627   68,923
Total Revenue    151,271  136,977  154,605  188,922  234,916  290,219

Source: Dataquest (October 1996)

Dataquest will examine the major issues facing the semiconductor market during Semiconductor '96, its 22nd annual semiconductor conference titled "$300 Billion Challenge: Let the Games Begin." The two-day conference will be held October 24-25 at the Renaissance Esmeralda Resort in Indian Wells, Calif. Dataquest analysts and industry executives will forecast where the market is heading and how companies can maintain their competitive advantage. For registration or press pass information, please contact Ann Fitch at 714/476-9117.

For more information about subscribing to Dataquest's Worldwide Semiconductor program, please call 800/419-DATA. More information about Dataquest's programs, descriptions of recent research reports, and full text of press releases can be found on the Internet at http://www.dataquest.com.

Dataquest is a 25-year-old global market research and consulting company serving the high-technology and financial communities. The company provides worldwide market coverage on the semiconductor, computer systems and peripherals, communications, document management, software, and services sectors of the information technology industry. Dataquest is a Gartner Group Company.

CONTACT: Dataquest

Tom McCall, 408/468-8312

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