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MARCH 30, 2001 RELEASE

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IC Insights Lowers 2001 IC Market Forecast, Raises Outlook for 2002

April McClean Report 2001 Update details new forecast

Scottsdale, Arizona — March 30, 2001 — IC Insights has lowered its 2001 worldwide IC market forecast to -9 percent, down from its previous forecast of 7 percent. On the bright side, IC Insights forecasts that the global IC market will rebound to display an 18 percent increase in 2002, up from its previous forecast of 9 percent growth.

IC Insights’ initial 7 percent IC market forecast for 2001 assumed a 3.4 percent worldwide GDP growth rate and a 7 percent increase in electronic system sales. A reduction of these growth expectations to 2.8 and 4 percent, respectively, were the major factors contributing to the new, lower 2001 IC market forecast.

Moreover, the 2001 IC industry is being impacted by all three conditions associated with a cyclical downturn — an IC unit inventory burn, wafer start overcapacity, and a global recession or significant economic slowdown. Essentially, the 2001 IC industry is encountering what could be described as "The Perfect Storm." In fact, the current IC inventory burn is expected to be so severe that IC Insights believes 2001 will be only the second year in the last 22 years to exhibit a decline in IC unit volume shipments (the other being the inventory burn year of 1985).

Overall, IC Insights believes that favorable global economic conditions and balanced IC inventories will lead to a double-digit rebound in the IC market in 2002. In the current IC industry cycle, 2001 is shaping up to be an "adjustment" year with 2002 likely to be a recovery year.

Since late 2000, IC Insights has stated that it believes the current IC industry downturn could play out in one of two ways.

1) Register two years (2001 and 2002) of less than 10 percent IC market growth, or,

2) Encounter one significantly negative year (2001) followed by a recovery year (2002).

IC Insights currently believes that the second scenario is the most likely path that the IC industry will follow. More details regarding IC Insights’ revised forecast will be forthcoming in the April Update to The McClean Report — 2001 Edition.

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 1997, IC Insights offers coverage of global economic trends, IC market forecasts, 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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