Semiconductor demand forecasts strong

Production capacity rises, indicating continued strong growth ahead for PCs, mobile phones

Semiconductor manufacturers upped the capacity of their plants in the July-September quarter in the latest sign of healthy demand for digital devices.

World semiconductor production capacity rose 6.7 percent from the previous quarter, according to Semiconductor International Capacity Statistics (Sicas), which takes its data from 50 major global semiconductor makers. The figure reflects investments made by major chipmakers such as NEC and Fujitsu in new production equipment, and indicates chipmakers foresee continued growth in demand for PCs, mobile phones and other chip-based gadgets.

Semiconductors are the basic building-blocks of digital technology, including crucial components such as microprocessors and memory.

The world's top chipmakers have been raising capital spending to ramp up production, prompted by booming sales of digital devices, an official for Sicas' Japan office said.

Earlier this month, Japanese chipmaker NEC raised its forecast of capital investment on semiconductors to 217bn yen (about £5.43bn) for the year to March 2001 from an earlier 200bn yen and compared with an actual 150bn yen a year earlier.

Fellow high-tech leader Fujitsu also boosted its forecast spending on chips to 220bn yen for 2000/01 from 160bn yen and against an actual 87.9bn yen a year earlier.

Other chipmakers such as Toshiba, Hitachi and Mitsubishi Electric have also raised their chip capital spending plans.

Reuters contributed to this report.

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