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March 28, 2000 RELEASE

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Momentum Indicator Discovered

1Q00 results foretell a strong 2000 IC market

Scottsdale, Arizona — March 28, 2000 — IC Insights is always on the lookout for indicators and predictors for the worldwide IC market. One such example is IC Insights’ discovery of the tight historical relationship between IC ASP and capital spending growth. While the perfect IC market forecast model has yet to be developed (and we doubt that one will ever be developed), an interesting correlation surfaces every so often (Figure 1).

Figure 1

Figure 1 graphs the relationship between the 1Q/4Q IC market percentage change and the annual IC market growth for a given year. As shown, we have labeled the figure as a "momentum indicator." This is because the actual 1Q/4Q change does not directly forecast the ultimate annual growth for a given year, but instead more accurately describes the momentum and direction of the market. For example, 1991 showed 0 percent 1Q/4Q growth and 9 percent annual growth, whereas 1999 displayed a 2 percent 1Q/4Q decline and a total year increase of 19 percent.

It appears that the 1Q/4Q IC market change can assist in gauging annual IC market momentum. As shown, the 1Q/4Q 2000 change is forecast to be 0 percent. However, at least a 23 percent annual growth rate is forecast for the worldwide IC market in 2000 (which appears to be in line with previous market momentum trends). It is interesting to note that if sequential quarterly IC market growth throughout 2000 remains flat from 1Q00 (forecast to be $38.4 billion), the full-year 2000 IC market would still register an 18 percent increase over 1999.

About IC Insights

IC Insights, Inc., based in Scottsdale, Arizona, is dedicated to providing high-quality, cost-effective market research for the integrated circuit industry. Founded in October 1997, IC Insights offers coverage of global economic trends, the IC market forecast, capital spending and fab capacity trends, product market details, and technology trends, as well as complete IC company profiles and evaluations of emerging markets for ICs.

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