Cupertino, California: October 30, 2002   The IC Industry is on the verge of reaching its normal rate of growth. This is the message from Advanced Forecasting, Inc., a quantitative based forecasting firm, whose IC Recovery Index has demonstrated its accuracy in predicting this volatile market for the past 16 years.

Since April this year, and following the Index's minimum point in October 2001, we have staunchly notified our readers that the IC Industry will return to a normal growth-rate at the end of 2002, said David Crume, AFI's director of marketing and sales, adding, recent industry sales numbers are confirming that our forecast, essentially without retroactive modifications, is materializing.

A ten-year chart of IC Revenues growth rate is available from: info@adv-forecast.com.

Industry data recently published by WSTS followed the forecast of AFI's proprietary and quantitative model, which avoids human opinion as input. IC revenues for August 2002 delivered +14% growth over August 2001, and AFI expects this positive pattern to continue into the fourth quarter. Growth rate is calculated on a 3-month moving average versus the same period one year earlier. According to this calculation, growth rate of IC revenues worldwide sank to its lowest level (46%) in September 2001.

Dr. Moshe Handelsman, founder of AFI, positions the current situation on the IC cycle, saying: the last time the IC Industry passed the +14% growth rate was in June 1999, the early stage of recovery from the 1998 recession. However, the current situation is quite different from the 1999 upturn due to the monumental heights of capacity buildup during 2000. This generated a recession deeper than in 1985 and continues to haunt the industry today, thanks to several forecasters, among other sources, that mislead the industry.

Though passing the 14% mark is good news to the battered IC Industry, AFI is quick to point out that, unfortunately, total IC revenues throughout 2002, will end with a dismal annual growth over 2001. Compared to other industry analysts, who envisioned the annual growth of IC revenues for 2002 would increase in the range of 14% to 20%, AFI cautioned as early as November 2001 that 2002 would end with a negligible change. As in previous industry Turning-Points, actual industry data have fulfilled AFI's quantitative forecasts, forcing hasty qualitative forecasters to modify their forecasts.

AFI offers monthly quantitative forecasts of all ICs, semiconductor equipment (Front-End and Back-End), disk drives, PCBs, Fab Capacity Utilization, Wafer Shipments and DRAM ASPs. Forecast rolling horizons extend up to 29 months. AFI is the only forecast firm that has guaranteed its forecasting services with a full refund period since its inception (1986). More information about AFI's methodology, publications, and services is available online at http://www.adv-forecast.com.

(*) Note: In a December 2001 article in Electronic Business (p. s10), AFI's forecasts were identified as one of the 10 Vital Signs of the Electronics Industry.

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