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LACKLUSTRE OUTLOOK FOR WORLD CHIP MARKET IN 1987, ANALYSTS FORECAST

Bloated semiconductor inventories and excess manufacturing capacity installed during the 1984 boom will continue to dampen demand throughout the worldwide semiconductor industry for the next 12 months, said industry analysts at the Semiconductor Equipment and Materials Institute’s 10th annual Information Services Seminar in Newport Beach, California last week. Growth forecasts for worldwide semiconductor sales in 1987 varied from the 9.3% figure presented by Jack Beedle, president of In-Stat, to a prediction of 17% growth by Jerry Hutcheson, chief executive of VLSI Research. Most analysts expressed higher hopes for 1988, with growth predictions in the range of 16% to 26%. In breaking out his own forecast for 1987 by region, Beedle predicted 5.1% growth for the US industry, 8% expansion in Japan, a 9.2% surge for Europe and explosive 32.6% growth for third world countries led by Korea. In forecasting sales of the equipment used to manufacture chips, VLSI’s Hutcheson predicted that 1987 would get off to a slow start followed by a sustained six-month rise in equipment orders beginning in the second quarter. He saw that the world market for manufacturing equipment growing 5.1% to $2,500m in 1987, and then surge 39% in 1988 led by microlithography and deposition systems. He predicted global sales of assembly equipment up 7.8% to $49m this year, followed by phenomenal 45% growth in 1988. The bulk of the equipment market’s comeback, however, will be in wafer transport equipment and verification systems such as automated test equipment, optical inspection equipment and computer-aided design and manufacturing systems. Hutcheson saw this global market growing 10.8% to $2,300m in 1987, and another 29.2% in 1988. Momentum is building very slowly in the semiconductor materials business, said Dan Rose, president of Rose Associates. The worldwide market for materials is expected to grow 6.9% to $3,100m in 1987 before getting back on track with 14.7% growth in 1988. Rose forecast that the global market for chip packaging would fare a little better, growing 9% to reach $1,900m by year-end.

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CBR Staff Writer

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