Chip Industry Seen Rebounding in ’98

The worldwide semiconductor industry will end 1997 with sluggish growth of 5.5%, reaching $131.9 billion in sales, but a rebound is expected next year, the San Jose-based Semiconductor Industry Assn. said in its annual forecast. This year the semiconductor industry was recouping from its first drop in sales in almost 10 years because of a collapse of memory chip prices and an ensuing inventory glut in 1996. The SIA also said that, for the first time, growth in 1997 was hampered by the stronger U.S. dollar in Europe and Japan. Before the impact of the stronger dollar, the SIA said 1997’s growth rate would have been 10.4%. “This is the first year in memory when currency fluctuations have had a demonstrable impact on dollar-based growth rates,” the SIA said. In 1996, global chip sales fell 8.6% to $132 billion, the first drop in almost 10 years. Sales last fell in 1985, tumbling 30% amid an industry recession.