Expect tantalum capacitor tags to rise in the fourth quarter and into 2003. While prices for tantalum caps have only recently stabilized after declining for much of 2001, demand is expected to rise as end equipment demand picks up. Buyers can expect prices to rise 3% in the fourth quarter and another 8% by the end of the second quarter of 2003.

DRAM tags are on a roller coaster ride this year. The average price of a DRAM increased from $1.78 in the fourth quarter of 2001 to $3.84 in the first quarter of this year. However, DRAM tags were falling in the second quarter and will likely average in the $3.00-$3.50 range for the quarter. However, prices will rise again in the second half and average more than $4.00 in the fourth quarter.

Keep an eye on standard logic suppliers. Some may downsize their product families because demand is weak, prices are low and it is hard to make a profit. More chip companies may get out of the logic business to focus on higher growth products such as analog ICs.

Expect more Bluetooth chipsets to appear on bills of materials over the next five years. The number of Bluetooth chipsets shipped will grow from 10.4 million units in 2001 to 690 million in 2006. Revenue will grow from $150 million to $2.7 billion over the same period. Cell phones, personal digital assistants, gaming systems and computers will drive that growth. Bluetooth technology provides short distance wireless connectivity between electronic equipment.

The connector industry is still reeling. For the first four months of the year sales were down 27.1% compared to the first four months of 2001, according to market researcher Bishop and Associates. However, the industry had a book-to-bill ratio of 1.03 in April meaning that for every $100 of connectors shipped, connector makers received $103 worth of new orders. The industry is expected to grow 5.5% in 2002 with most of the growth occurring in the second half of the year.

A transition in DRAM densities is under way. Evidence: In the fourth quarter, 74% of all DRAMS shipped were either 64-megabit (Mb) devices or 128 Mb parts. In the first quarter of 2001, that percentage decreased to 65% while 256 Mb parts and 16 Mb parts increased their shares five and four percentage points respectively, according to IC Insights. Mainstream computers are moving to the higher density parts while lower end PCs are using the lower density parts.