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The chips were up in 1999

Intel leads pack as semiconductor market booms

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World chip sales increased 18 per cent last year to a value of $160 billion, with growth set to rise in 2000, according to Dataquest. The spurt from $136 billion in 1998 was the biggest for four years, with no surprises as Intel stayed on top with over a fifth of the market – notching up sales of $26 billion. Chipzilla claimed a $16 billion lead on the market's number two, NEC. Growth is expected to speed up over the next few years as the rest of the world plays catch up to the US Internet and mobile phone frenzy," said Joe D'Elia, senior analyst at Dataquest. "If you look at the industry worldwide, the driving force behind growth is the Internet. In the US, the uptake of fast modems and ADSL is much more advanced than in Europe and Japan, and the rest of the world will have to catch up," said D'Elia. Dataquest's current forecast for global chip sales growth for 2000 is 18 per cent. "But I wouldn't be surprised if it was more like 30 per cent, judging by events over the last four months," said D'Elia. D'Elia thinks the strong growth will continue until mid-2003, when the industry will see production rises causing a glut. "Collectively, we will see DRAM vendors do well this year. But if we look outside that group, the companies to watch will be those such as Texas Instruments, Lucent and ST Micro Electronics – in the communications sector, involved in data communications, cable modems and telecomms," he said. Intel may have kept the lion's share of the market, but its grip is steadily declining. NEC's sales were up 12 per cent on the previous year, giving it a market share of 5.8 per cent. Intel's slice was slightly down on the previous year at 16.1 per cent. Toshiba had sales of $7.6 billion in 1999, up 28 per cent and making it the third biggest vendor with 4.7 per cent market share. ®

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