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  1. Technology
November 13, 1988


By CBR Staff Writer

Worldwide demand for semiconductors is expected to slow down in 1989 following a year of strong growth. Speaking at the company’s annual European Semiconductor Market Review at the Barbican centre on Friday Jan Calen, Motorola’s European marketing director, said that he expected the world market for semiconductors to grow by 10.2% in 1989, compared with 38.2% in 1988. Demand this year has proved surprisingly strong, con founding most forecasts, and there was no real impact from the stock market crash of 1987. Europe enjoyed a growth rate of 31.1%, more or less in line with the rest of the world, but is expected to slow to 4.4% in 1989. Memory chip suppliers enjoyed substantial price increases in Europe this year, which is unlikely to be repeated even though there is no end in sight to the DRAM shortage, while microprocessor prices will fall. US and European-based companies were far more successful in Europe than their Japanese rivals who were strong in memory chips: US-based companies supplied 44% of the market, European companies 40%, and the Japanese supplied only 14% even with all those memory chips. The UK market looks quite prosperous, enjoying above average growth; demand for semiconductors is expected to be up 13.7% rising to $1,978m from $1,741m. UK demand rose 29% this year, the second highest growth in Europe after Italy, which grew a whopping 49%. Though still the largest consumer of microprocessors in Europe, West Germany continues to lose market share with a growth rate half the European average. However if the forecasts prove correct, it will remain at the top of the European heap, accounting for 26.5% of the European market in 1989, followed by the UK with 22%, France with 15% and Italy with 12%. In Europe compu ters and home electronics will each account for appr oximately one quarter of semiconductor shipments, followed by industrial and communications users with just under 20% apiece. On the product side there is expected to be considerable demand for ASICs and memory chips, which are expected to experience growth rates of 26.2% and 22.5% respectively, followed by microprocessors with predicted growth of 17.2%. In the UK much of the market growth last year was gener ated by the British operations of foreign multinati onals, while indigenous manufacturers concentrated on low growth areas, particularly telecommunications, wired systems and defence. Next year areas of medium growth are expected to be personal computers, cellul ar telecomunications and automotive electronics. Demand for semiconductors for consumer electronics will also increase strongly, Motorola says, driven mainly by Japanese manufacturers. (Growth in each country has been expressed in local currency, while the general figures are expressed in US dollars.)

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