January 8, 2002 — San Jose, CA — If someone were to write about the overall semiconductor market for 2001, it would go something like this… The industry experienced the worst decline in its history during 2001, according to a new report issued by Gartner Dataquest.

“As demand weakened and capacity utilization decreased, financial considerations became foremost in everyone’s mind. Thus capital expenditures took a back seat to everyday production needs,” notes Klaus Rinnen, chief analyst and director of Gartner Dataquest’s semiconductor manufacturing group.

Worldwide semiconductor capital spending totaled some $44.4 billion in 2001, a 29 percent decrease over 2000. Semiconductor equipment spending also dropped to $25.2 billion in 2001, from 39.9 billion in 2000, according to the market researcher.

So what does this mean for 2002? Gartner predicts that 2002 will be a transitional year for the semiconductor industry and says the industry may sees signs of recovery during the second half of the year.

“A macroeconomic recovery and returning electronic equipment demand should finally bring the demand-component of the down cycle under control. However, overcapacity remains excessive and still demands industry attention. With demand firming, the semiconductor industry will be afforded increasing visibility, finally being able to plot its course to another up cycle,” Rinnen adds.