Our industry hasexperienced a profound transformation. In the 1960's, when the semiconductorindustry first emerged from anonymity, the key driver of the industry was thegovernment and aerospace sector. Major applications were the Apollo spaceprogram and weapons systems such as the Minute Man intercontinental ballisticmissile.

With the end of theApollo program and the cuts in the defense budget after the Vietnam War, thekey driver of the industry shifted in the early 1970's to the corporateInformation Technology (IT) sector. The introduction of the IBM 360 (the firstuse of integrated circuits in a computer) and the mini-computer initiated thefirst IT boom in the late 1960's and early 1970's.

Corporate ITcontinued to dominate spending in the 1980's. With the introduction of the PCand Local Area Networks (LAN's), corporate IT grew to 60 percent of demand,while the government/aerospace sector declined to less than 10 percent ofdemand. Consumer products continued to gain in importance with the introductionof new products such as video games and the VCR.

In the 1990's,consumers emerged as the primary force driving semiconductor sales. If"consumer products" are defined as products purchased by individualconsumers with their own money, consumers now drive roughly half of allsemiconductor sales. With the Internet boom and declining PC prices,individuals now consume more than 30 percent of units sold in the PCmarketplace. Consumers dominate the cell phone market, more than 10 percent ofend semiconductor demand, by commanding more than 90 percent of sales. Theautomotive segment is similar. Semiconductor suppliers will need to refinetheir view of global markets, as the technology buyer of today may be ateenager listening to a MP3 player, while text messaging and sending pictureson a cell phone. Just as the corporate IT sector once largely determinedspending, the global consumer now dominates the technology spending of theearly 21st century.