November 2, 1995 in Nation/World

Computer Chip Growth To Slow In ‘96

Bloomberg Business News

The worldwide market for computer chips is expected to grow by 26 percent in 1996, slower than the 44 percent growth rate expected this year, the Semiconductor Industry Association said Wednesday.

The association, which compiles data for the computer chip industry, predicted last year that global market growth in 1995 would be 15 percent, then revised the forecast several times this year.

The industry will see sales rise to $185.1 billion next year from an expected $146.4 billion this year, according to World Semiconductor Trade Statistics, which gathers the data for the SIA.

The industry will have “uninterrupted growth through 1998, averaging 21.3 percent a year,” said Ray Stata, chairman of Analog Devices Inc., citing WSTS’s forecast.

Robust demand for computer chips is driven by increased use of consumer electronics devices with more advanced features, more use of processors in cars and industrial equipment and booming demand for computers.

Memory chip sales will lead the increase next year, the SIA said. The memory market is forecast to grow 41 percent to $76.0 billion in 1996 from an estimated $54.1 billion this year. Memory sales this year are predicted to be 67 percent higher than last year.

Siemens AG, Motorola Inc. and other chip makers are spending billions of dollars on new plants to manufacture computer chips, based on estimated annual growth of more than 20 percent in the next several years.

Next year’s growth will mark the fourth consecutive year of increases exceeding 25 percent, the SIA said. By 1998, the SIA predicts the market will reach $261.6 billion, with growth in 1997 and 1998 slowing to between 18 percent and 20 percent.

The North American market, which is the largest market in the world, is expected to rise 30 percent next year to $60.9 billion from $47.1 billion in 1995.

The Asia-Pacific market, which doesn’t include Japan, is predicted to see the highest rate of growth in 1996, with sales rising 33 percent to $40.1 billion, from $30.2 billion this year.

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