Semiconductor Trade Group Optimistic for 1987 : New Forecast Sees Growth in Chip Sales
To Wyle Laboratories, an El Segundo distributor of computer chips, sales forecasts like the one issued Thursday are becoming old hat.
The 16% growth in worldwide sales of the chips--predicted by an international semiconductor trade group--pretty well matches earlier analysts’ estimates and is heartening confirmation for an industry ravaged by more than 18 months of steep order declines and losses, plant closings and employee layoffs. But it is an estimate that jibes with what Wyle, a middleman for electronic circuitry made by some of the country’s largest manufacturers, saw as early as last September by tracking what it calls its 31 bellwether customers. Already Wyle is looking a bit further down the road so that it can be ready for even greater growth next year, President Charles M. Clough said.
World Semiconductor Trade Statistics Inc. believes that this year’s growth to $25 billion in worldwide sales will set the stage for 24% and 20% growth rates in 1987 and 1988, respectively. That would bring worldwide sales of semiconductors to $37 billion by 1988. The projections followed the annual meeting of the trade group’s 40-member international committee in Amsterdam in April.
Wyle, a major West Coast distributor, put in big orders last September--in the middle of the semiconductor industry’s worst recession--because it saw signs that makers of small- and medium-size computers soon would exhaust their inventories. It took until January of this year for Wyle’s bet to pay off, but semiconductor users did begin ordering again to replenish nearly bare cupboards and to meet daily requirements. Its move brought Wyle an escape from the recessionary environment during the first months of this year--sooner than suppliers like Intel, Motorola and Texas Instruments.
“If we can see the same (inventory) phenomena with the mainframe manufacturers, then we will make the same kind of commitment in June or July this year,” said Clough (pronounced cluff). He said technological advances--many of them based on Intel’s powerful new 80386 chip--will foster a boom in computer sales in 1987 when the new products become available. He said his company is now calculating how much money it will spend on new design centers in anticipation of growing sales of custom-designed semiconductors.
Domestic semiconductor makers will need to be healthier to face another trend predicted by the trade group and other industry analysts: that Japan will buy more semiconductors this year than U.S. customers. The worldwide group said that based on continuing increases in the value of the yen against the dollar, the Japanese market will grow nearly 25% to $9.5 billion this year, and it will be valued at $14 billion by 1988. The U.S. market for chips, on the other hand, will increase only 11.5% this year to $9 billion and, at $13.9 billion, will slightly lag the Japanese in 1988, according to the international semiconductor group’s forecast.
