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BW2073  JAN 17,2002       5:00 PACIFIC      08:00 EASTERN


( BW)(TX-INDUSTRIAL-INFO-RES) Capital Spending for the Semiconductor
Industry Shows Positive Signs Moving Into 2002, in an Advisory by
Industrialinfo.com

    Business/Energy Editors

	   HOUSTON--(BUSINESS WIRE)--Jan. 17, 2002--An advisory from
Industrialinfo.com (Industrial Information Resources Incorporated;
Houston). Despite worldwide employment losses in the semiconductor
industry, new economic data may suggest an upturn in the industry
during the second quarter of 2002. According to the recently released
Semiconductor Billings Report produced by the Semiconductor Industry
Association (SIA) and the Semiconductor Equipment and Materials
International (SEMI) association, November 2001 global chip sales
increased by 1.5%.
	   Typically, fourth quarter sales are normally high inline with the
holiday season and though 2001 fourth quarter sales may still lag
behind historical figures, any consecutive rise in semiconductor sales
may indicate that a bottom has formed and a recovery may be near. Over
the next few months, consumer demand will dictate whether or not the
upswing in sales will continue. Currently, the two biggest consumers
of tech products relative to semiconductors are multinational
corporations and telecommunications companies. It is estimated that
global spending for hardware and software by consumers will reach $600
billion in 2002. Any further investments will be dictated by the
future state of the economy.
	   During 2001, most semiconductor manufacturers scaled back
production to reduce inventory levels while demand remained weak. Many
companies announced employee layoffs that will continue through 2002.
For example, one of the largest employment losses came from Motorola.
The company announced in December yet another layoff of 9,400
employees. By mid 2002, total losses for the company will account for
over 150,000 jobs since August 2000. NEC announced plans to suspend
chip production in Scotland and lay off 1,260 employees by April of
2002. Several domestic production plants of NEC have also been scaled
back because of the economic downturn. Santa Clara, Calif.-based
Applied Materials Inc. recently announced that approximately 450
positions at their Silicon Valley fab facility and roughly 600
positions at their Austin campus would be cut. Although the list
continues, employment data always lags behind other indicators. These
manufacturers are simply reducing costs during a period of
uncertainty.
	   As the year unfolds, semiconductor sales still remain in question.
Capital spending for the industry is expected to be down. Some
semiconductor manufacturers may continue to invest in process
automations to stay ahead of the competition. The next wave of
production technology automation will come from the transition to
300mm silicon wafer production. Semiconductor equipment vendors are
pushing hard for manufacturers to modernize into new processes. This
could come soon. Industry experts are forecasting a recovery by mid
year 2002 spurred by consumer confidence. If so, semiconductor
manufacturers may increase 2002 capital investments. With inflation
under control, combined with eleven consecutive interest rate cuts
that have made borrowing more attractive, corporations have the right
formula to move forward with automation and technology investments
that will drive semiconductor manufacturers to expand.
	   Industrialinfo.com is a leading provider of information in the
industrial markets, including the semiconductors industry. For 2002,
industrialinfo.com released the 2002 Industrial Outlook
(http://www.industrialinfo.com/indoutlook.htm) that outlines in detail
issues and trends including spending forecast for the industrial
markets. For more information on the 2002 Industrial Outlook and other
products supporting the industrial markets send inquiries to
industrialmanufacturinggroup@industrialinfo.com or visit us at
www.industrialinfo.com.

    --30--AA/ho* as/na

    CONTACT: Industrialinfo.com, Houston
             Michael Bergen, 713/783-5147

    KEYWORD: TEXAS CALIFORNIA UNITED KINGDOM INTERNATIONAL EUROPE
    INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS ENERGY MANUFACTURING
UTILITIES
    SOURCE: Industrialinfo.com

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