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May 3, 1988

SEMICONDUCTOR BODY SEES CHIP SALES GROWTH NARROWING TO 3.9% NEXT YEAR

By CBR Staff Writer

Departing from its usual super-bullish stance, the US Semiconductor Industry Association in San Jose, California is forecasting the next recession in the painfully cyclical semiconductor industry for next year. The current climate bears all the hallmarks of the run-up to the 1985 recession, with something like 30 companies scrambling to secure all the chips they can find in the hope of winning a 10% share of – this time the engineering workstation market. Last time it was the MS-DOS micro market, and once again, the sums don’t add up, and some of the players are likely to be disappointed all the way to the bankruptcy court. The Association is forecasting that after a 30.1% growth in the industry this year, growth in worldwide sales of chips will next year slow to a painfully slow 3.9% – and Dataquest believes that the memory chip shortage will not now ease until the middle of next year.

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