SIA REPORTS GLOBAL SEMICONDUCTOR MARKET TOPS $200 BILLION MARK FOR FIRST TIME.

The Semiconductor Industry Association (SIA) has announced that worldwide semiconductor sales reached $17.9 billion in December, with year-end industry sales totaling $204 billion, a new industry record.

"Driven by sales of communications solutions for data networking, broadband, wireless, optoelectronics, and the continued demand for the personal computer, the year-end sales numbers released today represent a 37% growth rate for our industry over last year," said George Scalise, SIA president. "This was a very exciting year for our industry and reaching an all-time record high in sales of $204 billion is a great way to close the books for year 2000."

December sales of $17.9 billion, a decrease of 2.1% from November results, are in-line with normal year-end patterns. The SIA forecast for 2001 calls for 22% year-over-year growth, however, due to the inventory overhang going into 2001, it is unlikely we will achieve that projection.

The industry witnessed across the board growth in all markets, and product demand was strong in every region of the world. Flash memory, logic, analog, optoelectronics and programmable logic devices (PLDs) are expected to continue to be the current leaders in growth of the semiconductor market as they drive internet infrastructure and communication applications such as base stations, cellular phones, personal digital assistants, and digital photography.

Flash memory increased 133.2% in 2000, primarily driven by a broad base of applications led by cellular phones, and totaled $10.6 billion. PLDs increased 88.2% in 2000 due to strong communications demand and totaled $5.5 billion.

The optoelectronics market, which includes laser devices and image sensors, is directly tied to the Internet bandwidth opportunity. This product sector experienced year-end sales growth of 69.7% in 2000, totaling $9.8 billion.

DRAM and microprocessors continue to play a large role in the semiconductor market. In 2000, DRAM grew 39.5% with $28.9 billion in sales, and microprocessors grew 17.2% with sales of $31.9 billion.

The global sales for December closed out the year with worldwide sales of $17.9 billion, an increase of 21.6% over $14.70 billion a year ago.

"Not only are semiconductors ubiquitous and indispensable to our everyday lives, they are being used in an even greater variety of communications, Internet infrastructure, and handheld applications," said SIA president George Scalise. "While traditionally there have been two dominant markets around the world, in these year-end numbers, we can see a broadening of product demand coming from all geographic regions."

In 2000, the Japan and Asia Pacific markets grew at 42.4% and 37.9%, respectively from last year. Japan is currently the fastest growing market and is the third largest of the markets by region, accounting for 22.9% of the world's consumption of semiconductors.

Asia Pacific is the world's second largest market for semiconductors accounting for 25.1% of the world's consumption. The rapidly expanding economy in the Asia Pacific market (including China) is due to the telecom insurgence.

The largest single market by region is the Americas, representing 31.3% of all consumption and grew by 34.9% last year. In the Americas, the Internet and communications revolution continue to drive the Americas' semiconductor market.

European sales grew 32.7% in 2000, driven in large part by telecom markets and wireless communications. Europe's market accounts for 20.7% of world chip consumption.

From its beginning in the 1950s, the semiconductor industry has been characterized by a four-year cycle, sporadically modified by unexpected economic factors. The semiconductor industry has grown at a compound annual growth rate (CAGR) of 17% over the past 40 years.

The SIA's Global Sales Report (GSR) is a three-month moving average of sales activity. The GSR is tabulated by the World Semiconductor Trade Statistics (WSTS) organization, which represents about 70 companies. The moving average is a mathematical smoothing technique that mitigates variations due to companies' monthly financial calendars.

The SIA is the leading voice for the semiconductor industry and has represented U.S.-based manufacturers since 1977. SIA member companies comprise more than 90% of U.S.-based semiconductor production. Collectively, the chip industry employs a domestic workforce of 284,000 people. More information about the SIA can be found at www.semichips.org.