• Expect DRAM tags to stay flat until second half 2002. DRAM demand won't be in balance with supply until at least third quarter of 2002, according to Samsung Electronics, the largest DRAM manufacturer. However, buyers should expect DRAM tags to increase in the fourth quarter and shortages are likely.

• Near-term outlook for crude oil prices is uncertain as noncartel producers resist pressure from OPEC to boost prices, which have dropped 40% since mid-September. Crude oil prices have fallen to the $17-$18 range because the cartel has refused to reduce output unless Russia, Norway, Mexico and other world producers do the same. OPEC hopes to get an agreement by January that would stabilize crude in the $20-$22/barrel range and avert a price crash such as the one that occurred in 1998, when crude bottomed out at $10/barrel.

• The connector industry should recover in 2002 after suffering one of its worst years in history, according to market researcher Ron Bishop. Connector sales will drop nearly 19% from $31.6 billion to $25.6 billion in 2001 because of the overall weak economy, declining demand and dropping prices. In 2002, worldwide connector revenue will rise 5.4% to $27 billion.

• Expect average selling prices for application specific integrated circuits (ASICS) to increase in the next four years. The good news is that functionality of the chips will expand at a much faster rate than prices will increase. Example: the average gate density for a programmable logic device (PLD) in 2000 was 27,000. By 2005 the average number of gates in a PLD will increase to 246,000. At the same time the average PLD price will rise from $10.74 in 2000 to $16.52 in 2005, according to IC Insights.

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Purchasing's business indicator was down in November, but
surveys returned in early December suggest this may be the
worst of the contraction.