GartnerGroup's Dataquest Says Worldwide Semiconductor Market Grew Nearly 18 Percent in 1999.

Business Editors/High-Tech Writers

SAN JOSE, Calif.--(BUSINESS WIRE)--Jan. 6, 2000

For the first time since 1995, the worldwide semiconductor market experienced double-digit growth as 1999 semiconductor revenue surpassed $160 billion, an increase of 17.6 percent over 1998 revenue, according to preliminary results from Dataquest Inc., a unit of Gartner Group Inc. (NYSE:IT).

"One of the key factors for the industry growth was the firming up of the DRAM market," said Joe D'Elia, chief analyst for Dataquest's Semiconductors Europe program.

"The Taiwan earthquake also had an impact on the market, as it forced spot market prices to treble in a matter of days, and although they fell back quite rapidly, once the full effect was known, the main impact was to accelerate the rate of rise of contract pricing."

Intel continued to dominate the market, as its 1999 revenue was $16 billion more than its nearest competitor (see Table). Samsung showed the strongest growth among the top 10 vendors, as its 1999 revenue increased nearly 50 percent over 1998 revenue.

Motorola was the one top-tier vendor who posted negative growth, although Dataquest analysts said this was because the company divested a major product division and a product line.

Top 10 Worldwide Semiconductor Vendors by Revenue Estimates (Millions of U.S. Dollars)

1998 1999                         1998    1999  1999 Market  1998-1999
Rank Rank Company               Revenue Revenue   Share (%) Growth (%)

1    1    Intel                  22,784  25,810       16.1       13.3
2    2    NEC                     8,227   9,216        5.8       12.0
4    3    Toshiba                 5,913   7,594        4.7       28.4
6    4    Samsung                 4,743   7,095        4.4       49.5
5    4    Texas Instruments       5,820   7,095        4.4       22.0
3    6    Motorola                7,088   6,425        4.0       -9.4
7    7    Hitachi                 4,668   5,521        3.4       18.3
9    8    STMicroelectronics
          N.V.                    4,199   5,080        3.2       21.0
8    9    Philips                 4,448   5,065        3.2       13.9
10   10   Infineon                3,909   5,010        3.1       28.2
          Others                 64,359  76,222       47.6       18.4
          Total Market          136,158 160,133      100.0       17.6

Source: Dataquest (January 2000)

"All geographies are growing, although the drivers are different for each region. While the Internet has contributed to the increase in most regions, its impact on the Americas has been overwhelming," said Ron Bohn, director of research for Dataquest's semiconductor group.

Additional information on this market is available in the Dataquest Alert "1999 Semiconductor Industry Growth Rebounds to 17.6 Percent!" This report provides preliminary 1999 semiconductor rankings worldwide, as well as in the Americas, Asia/Pacific, Europe, and Japan. Final semiconductor revenue figures and market share results are scheduled to be available during the second quarter.

This report is produced by Dataquest's Semiconductors Worldwide program. This program combines memory, microcomponent, logic, ASIC, analog, discrete device, RF, and optical segments into a complete industry picture. Products, suppliers, start-ups, technologies, regional consumption, applications, and emerging technologies are all covered in this broad program.

Additional information on Dataquest's semiconductor programs can be found on Dataquest's Web site at http://www.dataquest.com/dq/static/offer/programs/scnd.html.

To purchase the report or subscribe to this program, please call 800/419-DATA, or 408/468-8009. 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.

GartnerGroup's Dataquest is the recognized leader in providing the high-technology and financial communities with market intelligence for the semiconductor, computer systems and peripherals, communications, document management, software, and services sectors of the global information technology industry.

GartnerGroup, the world's premier business technology advisor, was founded in 1979 and is headquartered in Stamford, Connecticut. GartnerGroup provides unrivaled thought leadership for more than 9,600 client organizations worldwide. It achieved 1999 revenue of $734 million and has 80 locations worldwide.

GartnerGroup's 3,400 associates, including 1,200 research analysts and consultants, help clients achieve their business objectives through the intelligent and efficient use of technology. For more information about GartnerGroup's industry-leading research capabilities, services and events, visit the company on the Web at http://www.gartner.com.