Hope you all had a great holiday season and that you have a happy and prosperous new year!

November sales put chip business
on track for turnaround, SIA says

For the second month in a row, chip sales went up sequentially. That was enough for the Semiconductor Industry Association to pronounce the expected chip recovery this year to be on track. I don't think so, but it was nice to see global chip sales growing 1.6% in November to $10.6 billion.

"Our forecast released in November calls for 4th-quarter sales to be 4.7% higher than the 3rd quarter--and with two months of data in--we are on target to meet that projection," declares George Scalise, president of the U.S. trade group. "Personal computers, wireless communications, consumer products, and automotive products continue to fuel semiconductor sales and lead the industry out of its year-long recession."

Europe led the way by growing 5.3% in November over October, while Asia Pacific was next with a 2.5% increase. But it was a different story in the Americas, where sales slipped 0.5%, and in Japan, which was down 1% from November, the SIA reports.

Despite two months of sequential growth, sales in November were still off a big 42% from the year-ago total of $18.27 billion.

The SIA is currently on record with a turnaround that begins in the 4th quarter, followed by a 6.3% rise in worldwide chip sales in 2002. When the numbers are in, the SIA figures that 2001 chip sales will fall 31.2% from the previous year, making it the worst recession ever in semiconductor history.

Today's SIA Global Sales Report shows chip sales in the Americas dropping 0.5% to $2.50 billion in November compared to $2.51 billion in October. Compared to a year ago, chip sales in the Americas were 55.4% below $5.60 billion in November 2000.

Asia Pacific chip sales were down 22.2% in the month, while Japanese chip sales fell 47.5% from the year-ago month. European sales fell 39% from the year-ago totals.

(See Jan. 2 story.)

IDC says IT market in 2002
may be better than expected

The outlook for the information technology market in 2002 may be brighter than some forecasters expected.

Economic assumptions for an upturn in IT markets by mid-2002 are "holding up," notes John Gantz, chief research officer at International Data Corp. In fact, these assumptions may be conservative, he says. "If that's the case, the IT recovery could come sooner and be stronger than we currently are predicting."

IDC now predicts that IT spending in 2002 will go up 4-to-6% in the U.S., 6-to-7% in Western Europe, and 10-to-12% in the Asia Pacific region.

IDC has come up with its own Top 10 list of predictions of what will happen in the IT market in 2002. In addition to predicting that IT spending will recover by mid-year, the researcher made these predictions.

1. China's entry into the World Trade Organization will help its IT spending to grow 25% annually "for years." By 2010, China will be the third largest IT market in the world.
2. A "crunch" will develop this year when users and workers with wireless and mobile Internet access create a demand for enterprise support that's not yet in place.
3. The "Bin Laden Effect" will drive enterprises to rethink their specs for business continuity--creating a need to reset IT security plans.
4. With Microsoft pushing Passport to XP users and competitors reacting, digital identity services will become real as Microsoft pushes Passport to Window XP users and competitors react. This will happen even if "single-sign-on" to the Web remains a consumer's pipe dream.
5. Streaming media will be hot as new standards come online and new services and market needs--some in reaction to the Sept. 11 terrorist attacks--come into play.
6. Hype for the concept of Web services will hit its peak in 2002-long before any critical mass of products or services in the market is reached.
7. Linux will have a "breakout year" in 2002. While there were a number of ways that this market could have gone in 2001--including into the tank--it now seems clear that Linux has become a viable alternative for enterprise use.
8. The market for "server blades" won't be a big money maker in 2002, but the new architecture will disrupt the entry server and appliance server markets. This is another disturbance in a server market that's already undergoing multiple transitions.
9. Some 75 million WinXP licenses will ship in 2002, but XP won't have the clout that Windows 95 did in driving hardware sales or generating first-time users.

(See Jan. 3 story.)

Here's a surprise! Some female EEs
make more than male counterparts

Since the results of this study were released the day after Christmas, you might have missed it during the rush of the holiday season. But the survey definitely is an eye-popper worth checking out.

Up until now, the median salary of a woman has ran far behind that of a man in most professions. We now have a breakthrough. A new survey by the IEEE, the professional electrical engineering society, shows that women with 20-to-29 years of experience are now being paid more than men. Wow!

This year's IEEE U.S. salary survey reports that women with 20-to-24 years of experience earn $100,037 annually, while men with the same experience had a median income of $98,500. And women with 25-to-29 years of experience had a median income of $107,000, while men received $99,600.

For double-Es with less than 20 years experience, it was the same old story. Men with five-to-six years of experience had a median income of $76,000 vs.$68,000 for women. Asian American IEEE members reported the highest median income at $99,000, according to the survey. The median primary income of all U.S. IEEE members participating in the survey was $93,100. Primary sources of income include base salary, bonuses, commissions, and self-employment income.

More than 9,500 IEEE members took part in the survey. Women now make up 6.8% of the IEEE's U.S. membership, which is still low. I can remember back in the 1960s, when everyone predicted that a flood of women would attend engineering school and change the all-male makeup of electrical engineering. Alas, it wasn't meant to be, partly because women were more interested in such professions as medicine, law, and business.

(See Dec. 27 story.)

2002 will be another 'ugly year'
for telecom equipment market

Capital spending by North America's top telecom service providers will slide another 24% in 2002 from the depressed levels of 2001, with major players such as Sprint and Qwest cutting their purchases by as much as 35%. Five other biggies--AT&T, Bell South, SBC, Verizon, and WorldCom--will spend at least 19% less on communications gear vs. what they did in 2001.

That grim prediction comes from Barry Jaruzelski, a managing partner of the global technology practice at Booz Allen Hamilton. "2002 will be an ugly year again, especially in wired telecom," he says. "Even if these seven service providers are not entirely representative of the whole, it's not going to be a pretty picture."

Several things are contributing to the continuing slowdown in telecom equipment spending, Booz Allen says. The competitive pressures are easing, he says, which doesn't help. Upstart players in digital subscriber line and cable data services, for example, have all but disappeared.

Also slowing down spending is the overall market slump, which is causing telecom companies to focus "intensely" on lowering costs. "The industry as a whole is becoming much more driven by managing income and balance sheets," notes Jaruzelski. "I think 2002 will be a pretty sober year. It will be a bit of a relentless grind."

The focus on costs will be reflected in information technology spending, which some analysts estimate will grow by less than 5% this year. "That's probably best case--flat is probably more realistic," Jaruzelski says. "Computer makers will be lucky to see revenues hold in 2002."

(See Jan. 2 story.)

TI to demonstrate its new
high-speed home network

Emerging products based on proposed IEEE 1394b specifications will soon be a hot item and Texas Instruments is moving fast to jump on this bandwagon. Next week the Dallas chip maker will demonstrate a new high-speed, home networking capability.

The company will use 1394b chip sets to exhibit 800-megabits-per-second communications over 100 meters of Category 5 cable, an item that's found in many homes today. The home networking capability is an extension of 1394b-based 800-megabits-per-second chip sets introduced last year by TI for PC systems.

The new 1394b home networking technology will be formally introduced by TI later this year. The chip maker also expects to roll out 1394b-based solutions for automotive systems.

"There are many opportunities for higher speeds," says Tom Ballew, TI's consumer electronics marketing account manager. "Initially, we will have 800-megabits-per-second networking speeds, but the 1394b standard will support speeds up to 3.2 gigabits-per-second," he notes.

The IEEE 1394b specification, which is now in the final stages of adoption by the industry, will be compatible with existing slower 1394a serial links. It will double the speed of serial communications as well as increasing distances by more than 20 times to 100 meters. The 1394b spec is expected to compete with other networking standards such as Ethernet for home and consumer applications.

The existing 1394a links already have made major inroads in such consumer video systems as camcorders and DVD players. TI and other proponents of the format believe the new, faster specification will address a broader range of digital consumer and computer applications, such as networks between home PCs, video game platforms, set-top boxes, and other entertainment systems.

More than 35 million PC systems and consumer electronics products were equipped with IEEE 1394a serial ports in 2001, according to Cahners In-Stat Group. The research firm predicts that more than 200 million products equipped with 1394 links will have been produced by 2005.

The first 1394b-equipped products will go on the market in mid-2002, according to TI. Initial applications will be in storage devices, with consumer electronics systems following in 2003, says TI's Ballew. Automotive applications are expected between 2004 and 2005, he says.

"We see the 1394b in the home office PC connected to the family room, where TVs, set-top boxes, and other entertainment systems will have 1394a," Ballew says. He estimates that a price of $50 or less for a wall-plate solution would be low enough to address these home networking applications.

(See Jan. 2 story.)

EDA revenues 'zig,' while
chips and chip gear zag

Sales of integrated circuits and chip production equipment may be doing lousy, but revenue from electronic design automation is doing quite good, thank you.

These revenues grew 9% to $987 million in the third quarter of 2001 from year-ago sales, according to the EDA Consortium, the industry trade group. This was a sequential gain of 1.4% from the previous quarter.

"We have seen accelerating demand in recent quarters, particularly for the core technologies that comprise the majority of the industry's total revenue," explains Ray Bingham, chairman of the EDA Consortium who is also CEO of Cadence Design Systems.

To deal with the increase in demand for design automation services, EDA vendors have increased their total headcount by nearly 3,000 new jobs in the past year, according to Bingham. Participating EDA companies in the survey reported total employment of 19,500 workers, 18% more than they employed a year ago.

Setting the pace for EDA growth was IC layout software, which accounted for record revenues of $306 million in the third quarter, a jump of 47% over revenues of $258 million in the same period last year.

EDA's largest tool category--computer-aided engineering (CAE) for IC development--generated revenues of $467 million in the third quarter of 2001, an 8% increase over the third quarter of 2000.

Revenues for semiconductor intellectual property, such as reusable RISC cores and other circuit-design blocks, grew 15% to $30 million in the third quarter from year-ago revenues.

(See Jan. 2 story.)

China market opened wider
for U.S. PC and IC suppliers

Well, China is getting more of what it has long sought from the U.S. in the trade world, and some people figure this could be a major business boost for global chip makers. I dunno--I'm a tad suspicious.

Anyhow, the Bush Administration has eased restrictions on computer exports to China, as well as to India, Pakistan, and Russia. It has lifted computer export controls to China, India, Pakistan, and Russia, easing a Cold War restriction designed to halt the spread of nuclear arms. The White House has more than doubled the processor speed limit.

PC and IC makers have been counting on growth in 2002 in China, India, and other emerging markets to offset the current business downturn in Europe and the U.S.

(See Jan. 2 story.)

Taiwan launches new drive
to boost SoC design work

Taking a leaf out of China's new strategy book, Taiwan is trying to keep up with its fast growing competitor by setting up a system-on-chip technology park to help the island's chip industry expand its advanced IC design capabilities and its role in global chip markets beyond manufacturing.

Taiwan's Industrial Development Bureau is now drawing up new rules for tax incentives on R&D efforts in the proposed SoC technology park, which is being planned for Nankang just outside Taipei. Its aim is to attract new research teams to the park and create a center for SoC design innovation.

Taiwan already claims it is the second largest IC design center after the U.S., but "we need to upgrade to a more integrated, value-added orientation," explains Hwang Tai-yang, director of the nation's Office of Committee for Information Industry Development. "Taiwan is moving beyond manufacturing operations and fulfilling OEM (original equipment manufacturer) orders to build up independent IC designing capabilities to ride the major trend of developing SOC for Internet and consumer-related products," he added.

To help Taiwan build out its capabilities in the semiconductor industry, the Ministry of Economic Affairs recently outlined new plans for SoC and chip-design investments under its "Silicon Island Project" during an annual semiconductor forum in Taipei. The Ministry said

Industry groups intend to form an IC design alliance in 2002 and set up a new design company to oversee cooperation with system companies in Asia, including Mainland China, according the Ministry of Economic Affairs. These design efforts will focus on CD, DVD, and telecommunications.

In addition to the SoC technology park, the ministry is encouraging multinational corporations to establish R&D centers on Taiwan and cooperate with local partners under the new system-on-chip initiative.

Taiwan claims the island's IC design industry had service revenues of $3.41 billion in 2001, a 3.6% increase over 2000. This business is expected to grow 24% to $4.23 billion in 2002 as more product development is transferred to the island.

Taiwan is targeting SoC development for broadband wireless applications, networking systems, Internet appliances, digital video, biochips, and intelligent transportation services, according to the Ministry of Economic Affairs. It is now earmarking $1 billion for R&D over the next five years for several strategic high-tech industries, including IC design, nano-technology, biotechnology, and third-generation (3G) wireless telecom services.

(See Jan. 3 story.)

EDA suppliers shine
in IPO performance

It might have been a crummy year overall for initial public offerings, but investors did flock to IPOs by electronic design automation suppliers in 2001. Three of the four best-performing offerings, in fact, were EDA firms: Verisity, Magma Design Automation, and Nassda.

Indeed, Verisity posted the single most successful performance of 93 IPOs in 2001, closing the year with a share price 170% over its Mar. 21st opening price of $7 per share.

Magma, which went public Nov. 20, was the second most successful IPO with a 132% gain over its $13 per share offering price. Nassda ended up as the fourth most successful IPO with a 104% gain over its Dec. 13th offering price of $11 per share. A 75% increase in the share price of PDF Solutions since its $12 IPO in mid-August put that EDA company in seventh place, according to an analysis by EE Times and Robertson Stephens.

The successful record of these firms doesn't seem to surprise the stock analysts. John Barr, Robertson Stephens analyst says the EDA companies benefited from a natural upturn that coincides with IC makers' desire to buy new tools even while other technology sectors were experiencing a severe down cycle.

"The last time we saw EDA companies going public was back in the 1996 time frame and that was during a retooling cycle where chip designers were buying tools for 0.35 micron," Barr says. Other firms were having successful IPOs at that time so EDA didn't seem all that great, he notes. "Now the EDA industry is showing strength in difficult times and is getting more attention."

EDA industry slumps typically trail semiconductor industry slumps by six months, according to Garo Toomajanian, research analyst at RBC Capital Markets. That didn't happen in 2001 because the semiconductor downturn occurred at a time when new tools were needed for the transition from 0.18-micron to 0.13-micron design rules, he points out.

Toomajanian figures "the general markets will pick up in 2002 and that EDA will do well. We think there is a lot of pent-up demand--that people perhaps wanted to buy more tools but put those requests on the back burner for budgetary reasons."

(See Jan 4 story.)

Asian nations latest to try
duplicating Silicon Valley

They're at it again. For decades, various groups around the world have tried to duplicate the success of California's Silicon Valley. Nearly always, they failed at it.

Now 17 countries in southeast Asia want to create an Asian information technology belt that would link key cities into a regional grouping similar to Silicon Valley. Singapore, which would serve as headquarters, leads the effort.

The information and communication technologies markets of some "individual Asian cities and countries are currently low on technological know-how and expertise," comments Harres Tan, chairman of the group, which is called Asocio. "The Asian belt aims to pull together cities to find synergies and forge a complete and robust global presence for Asian industry." This belt will create a regional IT group similar to Silicon Valley, he says, and will "ensure that Asia remains a credible player in the global Internet revolution."

The Asia belt is due to be implemented within the next 12 months and will include a network of 15 to 20 cities in member countries that will work to promote mutual trade among the member cities and countries. They will try to boost investment in the region as well as launch technology incubation centers.

The Asian technology belt is a "great opportunity for India to share its expertise and services and to learn from its counterparts, such as South Korea on broadband, Japan on wireless and Singapore on building a strong communications infrastructure," comments Phiroz Vandrevala, chairman of Nasscom, India's software industry association.

(See Jan. 3 story.)

Steve Jobs expected to reveal
dual processors, LCD displays

The annual guessing game was underway this week in the trade press on what new technology Steve Jobs, CEO of Apple Computer, will unveil in his MacWorld keynote address on Monday. Showman that he is, Jobs loves to surprise his loyal customers, so there has been no advance publicity to speak of.

The current buzz suggests that he will unveil a fresh line of flat-panel-based iMacs that will help the PC maker to maintain its lead in stylish design. Jobs is also expected to reveal dual processor versions of the iMac for the first time.

Analysts see the new PC innovations creating a buzz but not a marketshare breakthrough for the company. "This will help Apple keep its business, but won't help it to break out of its traditional 4-to-5% share of the desktop market," predicts Martin Reynolds, Gartner Dataquest analyst. "They haven't been able to gain market share for a long time, but they have been able to keep it stable."

Other PC makers are not expected to follow Apple's move to flat panels because corporate users are unlikely to adopt flat-panel desktops and the consumer PC business is too cost-sensitive to support LCDs. A 15-inch LCD would bring the retail price of the lowest cost iMac to $1,000 or more, but Reynolds says that "still would be a compelling product that fits the Apple image."

"A week from now I don't think you'll be able to find any more CRT-based iMacs," said (Seaford, N.Y.). The move also could make Apple the biggest backer of the digital video interface (DVI), a de facto standard for linking desktops and LCD monitors.

Apple is also expected to expand significantly its use of dual processing this year. "Everything except the laptops will go multiprocessing," predicts Richard Doherty, principal of the Envisioneering Group.

(See Jan. 3 story.)

Micron said to be offering
$5B for Hynix DRAM biz

Negotiations going on between Hynix Semiconductor and Micron Technology continue to be big news in Seoul. On Friday, according to Reuters, there were reports that creditors of the troubled, South Korean DRAM giant might ask Micron to pay nearly $5 billion for its DRAM assets in a deal being negotiated by the U.S. company to take over Hynix's memory business.

Earlier, Hynix had reported that two scenarios were being considered under which Micron would take over its memory business instead of the two DRAM giants creating an alliance. Reports surfaced this week that Micron was planning to offer stock valued at $4-to-$5 billion for Hynix's core memory business. "I think creditors want that amount $4.6 billion, which is just equivalent to their 6 trillion won in exposure to us," a Hynix official tells Reuters.

(See Jan. 4 story.)

Hynix again tries to raise cash
by bumping up DRAM prices

Is Hynix Semiconductor getting panicky? Once again, in what could be a last ditch effort to raise capital, the troubled DRAM giant has raised its prices for some memory chips by up to 30%.

The South Korean chip maker hiked its long-term contract prices for 128-megabit DRAMs, according to reports. Its big DRAM customers in the U.S. include Compaq, Hewlett-Packard, and IBM.

This was the third DRAM price hike in the past month. Hynix, along with South Korea's Samsung Electronics, jumped DRAM prices at least twice in December.

These all-out attempts to raise money by the debt-laden DRAM maker come at a time when Hynix is engaged in serious merger talks with Micron Technology. The U.S. DRAM giant is considering a formal merger instead of a strategic alliance with Hynix.

(See Jan. 2 story.)

It's showtime for Intel's DDR
chip set and 2.2 GHZ processor

Intel probably figures its P4 marketing problems will be all but over on Monday when it launches its long-awaited 845D double-data-rate DDR chip set and the 2.2 gigahertz, 0.13-micron Northwood Pentium 4 processor.

The chip set "will finally give the market the mainstream P4 with the memory everyone wants," says Greg Fawson, analyst at InQuest Research. "It should boost P4 sales significantly," he predicts, "without Intel having to artificially stimulate the market by severe price cuts as it had to last year."

Fawson's only worry here is whether Intel will be able to produce enough 845D DDR chipsets to meet a likely high market demand. While its chip set rival, Via Technologies, has brought out its own P4 chip set to market, a patent infringement suit by Intel has discouraged most motherboard makers from buying them.

Another possible fly in the ointment: Fawson says the corporate market "wants an integrated graphics chipset supporting DDR, and Intel won't have that until much later this year. This will hold back what otherwise could be a big acceptance by corporate buyers who have long waited for Intel to come out with its DDR chipset," he adds.

(See Dec. Jan. 3 story.)

Qualcomm now shipping
its 3G cell-phone chip set

The declining capital equipment spending by telecom companies and the lengthening delays in moving to third-generation (3G) cell phones doesn't seem to be slowing down Qualcomm from moving ahead with its 3G chip set. It has started shipping the new product to at least eight of its customers.

The San Diego company is now producing its MSM5105, a 3G-enabled chip set based on the cdma2000 1X standard. But it is still unclear just when the 3G system will be deployed in North America.

The chip set was announced last year to support packet data rates of up to 153-kilobits-per second. The set provides for everything but the kitchen sink, including dual-band and tri-mode radio configurations, color displays, MIDI ringers, Internet access, two-way short message service (SMS), voice-activated dialing and speaker phone compatibility.

(See Jan. 2 story.)

We welcome your feedback, comments, criticisms, or questions. E-mail us at bhenkel@aol.com. And remember: God bless America!

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