Surprising growth forecast - Of Interest - Brief Article

Electronic News, March 4, 2002 by Richard Wilson, David Manners

DELEGATES AT THE RECENT INDUSTRY STRATEGY SYMPOsium (ISS2002) in Lisbon, Portugal, were taken by surprise by a forecast of 20.8 percent growth in the value of the semiconductor industry this year. Risto Puhakka of market watcher VLSI Research said, "We are estimating semiconductor industry growth of 20.8 per cent this year." Puhakka's forecast followed gloomy surveys from other analysts at the annual conference organized by Semiconductor Equipment and Materials International (SEMI). His astonishing expectation was met with skepticism from fellow analyst Jean-Philippe Dauvin of STMicroelectronics and the World Semiconductor Trade Statistics group. Dauvin projected a further decline in the industry of 2 percent this year; Klaus Rinnen of Dataquest projected 3 percent growth, and Malcolm Penn of Future Horizons forecast zero growth.

But Puhakka remained steadfast. "We believe this to the case because capacity is tight at the leading edge and our forecast is based on prices. Our unit forecasts are the same as everyone else but our forecast is based on pricing. Spot prices are 25 percent higher than they should be," Puhakka argued. Forecasts of the semiconductor demand are critical to the equipment and materials companies.