California Business Minute™

The California Workforce Association, CWA is a non profit
organization that formulates public policy strategies and
builds local capacity to address critical workforce issues.

CWA works to promote, enhance and serve the interest of local workforce development.

For further information, contact us  www.calworkforce.org or at 916 325-1610

Hi, I am Tim Johnson and welcome to the California Business Minute.

Last week the Semiconductor Industry Association, SIA released their forecast of
worldwide sales.  But even with slower than forecasted sales specifically for memory
chips, principally DRAMS due to price pressures, the Association still forecasts
semiconductor sales are and will continue at record levels.

SIA lowered its forecast for 2008 semiconductor sales growth from 7.7 percent to 4.3
percent despite continued healthy demand from key end markets simply because of
the DRAMS. But total semiconductor sales excluding memory products are forecasted
to grow by 7.4 percent in growth

The SIA mid-year forecast projects that 2008 sales will reach $266.6 billion and grow to
$324.1 billion in 2011. SIA projects a compound annual growth rate of 6.1 percent for the
forecast period, 2008-2011. The revised forecast projects that sales will grow by 6.2 percent
to reach $283.2 billion in 2009, by 8.4 percent in 2010 to $307 billion.

According the forecast sales of personal computers, the largest single market for semiconductors,
continue to be strong, especially in emerging markets. Total unit sales of PCs are on pace to
grow by 10 percent this year to around 300 million units. Cell phone unit shipments are expected
to grow by about 12 percent to more than 1.3 billion units, with the largest growth coming from
China, India, and other emerging markets.

SIA reported that unit sales of many other consumer products continue to be strong despite
widespread concerns about consumer confidence and rising energy prices. Unit sales of flat-panel
televisions are expected to grow by more than 29 percent and digital cameras are forecasted to
grow by 11 percent this year.

I am Tim Johnson and this has been the California Business Minute.

Profile of the U.S. Semiconductor Industry

• U.S. 2007 Sales = $118 Billion
• Worldwide 2007 Sales = $256 Billion
• 2007 US Market Share = 46 percent of $256 Billion Market
• U.S. Jobs = 233,000
• Percent of Sales Outside U.S. Market = 77 Percent
• Capital Equipment = $13 Billion, 11 Percent of Sales
• R&D Investment = $18 Billion, 16 Percent of Sales
• Historically 25-30 Percent of Revenues Invested in the Future