Expect flat panel display tags to rise. Weak demand and high inventory of displays caused prices to fall 50% last year but the surplus of thin-film transistor liquid crystal display (TFT LCDs) has been worked off and prices began to recover in fourth quarter 2001, according to market researcher DisplaySearch. As flat panel display demand rises in 2002, 5-10% price increases are likely.

Bad news for DRAM buyers. Hynix Semiconductor, the third largest memory IC manufacturer has increased contract prices for 128-megabit (Mb) devices by 30% effective Jan. 1. Samsung, the largest DRAM maker, says it is considering raising DRAM tags as well. Prices plummeted last year to the point where most DRAM manufacturers were selling the chips either at or below cost.

The price free-fall for high frequency, low power inductors appears to be over. After three consecutive quarterly declines of up to 18%, tags have stabilized. As prices fell, the inductor market fell from $6 billion in 2000 to $3.7 billion in 2001. In 2002 the market should rise to $4.1 billion, according to market intelligence provider iSuppli.

U.S. companies will boost information technology (IT) spending just 4% this year to $779 billion, says analyst Andrew Bartels at Giga Information Group. IT spending dropped 5% last year, compared to the mid-to-late 1990s, when annual tech spending growth regularly exceeded 20% per year. Overall, Bartels sees companies spending $205 billion on software; $178 billion on consulting, outsourcing and other IT services; $92 billion on communications equipment; $85 billion on computers and peripheral equipment, and $219 billion on IT salaries and benefits.

Consumer electronics giant Sanyo Electric and photo film mammoth Eastman Kodak will jointly produce ultra-thin next-generation organic electroluminescent (OEL) displays. The low-power OEL displays are targeted for use in cell phones, digital cameras and other hand-held electronic equipment with size and power constraints. The Sanyo-Kodak venture will launch volume output in February 2002.

Embedded flash will be a bright spot for the semiconductor industry in the next several years, growing at a compound annual growth rate of 26.4% from 2000 to 2005 when the market will reach $514 million. Embedded flash will be used for programming and data storage in cell-based application specific integration circuits ( ASICS ) used in communications equipment, according to market researcher Cahners In-Stat.