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May 18, 2000 RELEASE

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IC Insights Raises Its IC Market Forecast to 32% for 2000

Unit volume shipments spur IC market growth

Scottsdale, Arizona — May 18, 2000 — Based on expectations for continued strong IC unit volume shipments (forecast to increase 24 percent in 2000), IC Insights has raised its forecast for the 2000 worldwide IC market from 23 to 32 percent. Riding the wave of non-Japan Asia-Pacific growth, the rest-of-world (ROW) IC market is forecast to increase a booming 41 percent in 2000! The European, Japanese, and Americas IC markets are forecast to increase 36, 30, and 25 percent, respectively in 2000. This would leave the Americas IC market only 19 percent larger than the ROW IC market. In 1994, the Americas IC market was almost double the ROW IC market and was 50 percent larger as recently as 1998!

IC Insights believes that the second half 2000 IC market will show a 15 percent increase over the first half. While this is a significant increase, it is not as large as the 22 IC market surge displayed in the 2H99/1H99 timeperiod. It is interesting to note that if sequential quarterly IC market growth in 2000 remains flat from the first quarter, the full-year 2000 IC market would still be 20 percent larger than in 1999.

Assuming a 20-plus percent increase in worldwide PC unit volume, a 60 percent surge in cellular phone unit shipments (to 440 million handsets), and the introduction of the much anticipated Sony PlayStation2 video game in the U.S. in the fall (just in time for Christmas), the 2000 IC market is poised to enter a classic "boom" period.

What could go wrong? The U.S. Federal Reserve could go too far on raising interest rates, which could cause a stock market collapse and plunge the U.S. into a recession. The relations between China and Taiwan could suffer a setback or there could be another natural disaster (e.g., earthquake) in Taiwan, Silicon Valley, or Japan. Any of these scenarios would wreak havoc on PC and IC supplies (and sales) worldwide. However, IC Insights believes that without any interference from cataclysmic-type events, it will be "full-speed ahead" for the IC industry during the remainder of 2000.

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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