The Commerical Market

US Electronics Exports Rise 10 Percent in First Half of 1997
The Electronics Industries Association (EIA) reports that US electronics equipment exports reached $74 B in the first six months of 1997, a 10 percent increase over the total exports for the first half of 1996. The trade deficit for such equipment also was reduced substantially, falling to $5.7 B for the January – June 1997 period as compared to $9 B for the comparable period in 1996. The report also notes that from 1990 to 1996, electronics exports, as a percentage of all US exports, increased to 22 percent in 1996, a gain of 5 percent.

All electronics product categories recorded increased export sales over the first half of 1996. In the major categories, the largest growth by a wide margin was recorded by the electron tubes category with 1997 exports totaling $999 M, an increase of 43 percent over 1996 exports of $697 M. Cathode ray and computer display tube exports were credited for the bulk of the increase. Telecommunications equipment was second with a 19 percent gain from 1996 first-half sales of $8 B to $9.6 B in the first half of 1997. Consumer electronics was a close third as its sales grew from $2 B in 1996 to $2.4 B in 1997, an 18 percent increase. The defense communications category, recording its strongest showing in recent years, was fourth with a growth of 12 percent, producing first-half 1997 exports of $15.3 B compared to $13.7 B last year.

Canada, Mexico and Japan are reported to account for 30 percent of current total US telecommunications equipment exports. Growth of the Internet and wireless communications, and technology upgrades are expected to contribute to the continuing growth of this sector's domestic and foreign sales. Emerging markets in Asia and Latin America comprise six of the 10 largest export markets for consumer electronics.

GaAs/GaP Wafer and Epitaxy Market to Exceed $1 B in 2001
A report from Strategies Unlimited, "GaAs/GaP Wafer and Epitaxy Report–1997," which includes 1996 user and supplier survey results and five-year forecasts for six different gallium arsenide (GaAs) and gallium phosphide (GaP) wafer and epitaxy markets, forecasts that the worldwide market for GaAs/GaP will exceed $1 B in 2001. The report expects that the increasing use of GaAs analog RFICs for digital wireless telephony and digital ICs for high speed computer network interconnects will assure double-digit annual growth rates for semi-insulating GaAs wafer and epitaxy products over the next five years. A 10 percent compound annual growth rate for the total GaAs/GaP wafer and epitaxy market is forecast through 2001 with revenues rising from $639 M in 1996 to $1 B in 2001. Semi-insulating GaAs wafer and epitaxy demand, forecast to grow at a 14 percent compound annual rate, is expected to rise more rapidly than the demands for semiconducting GaAs and GaP, which are expected to grow at 9 and 7 percent compound annual rates, respectively.

The report notes that shipments by US semi-insulating GaAs wafer producers equaled those of the Japanese in 1996 and that European wafer merchants also increased their market shares in 1996. Major US GaAs IC suppliers to wireless handset and digital interconnect US markets bought substantial quantities of semi-insulating GaAs wafers in 1996 and contributed to the strong growth of US and European vendors.

Japanese vendors continue to dominate the semiconducting GaP wafer market while accounting for half of the semiconducting GaAs shipments in 1996. They also continued to supply the bulk of the world demand for GaAs/GaP epitaxy, accounting for 70 percent of that production in 1996, most of which was used for optoelectronic device production.

In addition, the report notes that strong demand for semi-insulating and semiconducting GaAs epitaxial wafers generated by interest in low noise psuedomorphic high electron mobility transistor and high efficiency, high linearity heterojunction bipolar transistor devices for personal communications service handset applications have lead to annual revenue increases as high as 40 percent from 1994 through 1996 for vendors of those materials in the US and other regions. For additional information, contact Strategies Unlimited (415) 941-3438, fax (415) 941-5120.

Northrop Grumman to Begin Mexican ATC Modernization
Mexico's civil aviation authority has awarded a contract to Northrop Grumman Corp. for the first phase of a multiyear, countrywide air traffic control (ATC) modernization program. Northrop Grumman's Electronic Sensors and Systems Division will provide a model ASR-12 solid-state primary surveillance system co-mounted with a long-range monopulse secondary surveillance radar (MSSR) for approach and terminal operations at the Guadalajara International Airport. A stand-alone MSSR will be located at Cerro Gordo near Mexico City to provide improved radar coverage for Mexico City's international airport. Radar data from the two systems will be transmitted to the Monterrey enroute control center.

The first phase of the program is scheduled for completion in August 1998. Follow-on phases of the modernization program include options for four additional stand-alone MSSRs and two additional primary surveillance radars co-mounted with MSSRs. The award closely follows recent Northrop Grumman ATC equipment awards for installations in Georgia, Bosnia-Herzegovina, Egypt, Saudi Arabia and Peru.

Hughes Receives Satellite Telephone System Contract
Hughes Space and Communications International Inc. (HSCI) and Thuraya Satellite Telecommunications Co. have signed a contract for a satellite-based mobile telephone system to serve the Middle East, North Africa and Eastern Europe, including Turkey, Central Asia and the Indian subcontinent. The system, the largest satellite communications project in the region, will cost approximately $1 B and cover an area encompassing nearly 1.8 billion people. The projected cost includes the manufacture of two high power satellites and launch services for the first satellite, and insurance, ground facilities and 250,000 handheld telephones. The first satellite will be delivered in 31 months and Thuraya will begin operations in 2000. The second satellite will be held as a ground spare; a third satellite may be ordered when needed.

The satellite will operate in geostationary orbit. A single 12.25 m aperture reflector will handle transmission and reception, and onboard digital signal processing will route calls directly from one handset to another or to a terrestrial network. The system will offer Global System for Mobile communications-compatible telephone services and employ a large number of spot beams, redirectable as needed to accommodate changing traffic levels. HSCI will work with Hughes Network Systems and Hughes Information Technology Systems to fulfill the terms of the contract.

Lucent Technologies Introduces Digital Wireless Telephone
Lucent Technologies has introduced a multifunction, digital wireless telephone that serves both analog and digital time-division multiple access 800 MHz cellular systems and digital 1.9 GHz PCS applications. The unit will be marketed under the Philips brand by the Lucent and Philips joint venture, Philips Consumer Communications.

The telephone features an intuitive user interface, and smart menus provide direct access to advanced telephone and network features. The unit can serve as a pager and provide voice mail notices, caller identification and call waiting. Over-the-air activation is permitted and intelligent roaming is supported. Privacy features include an authentication key, PIN security options and the ability to use secure channels provided by carriers.