``Given the strength in the information technology (IT) economy...we're liable to see a shortage of semiconductors across the board in the year 2000 and perhaps next year,'' Barrett told a news conference in Tokyo. Barrett was in Tokyo to attend a forum on e-business.

Intel, the world's biggest chipmaker, will spend about 80 per cent of this year's $6 billion in chip investment on manufacturing capacity for computer chips and the remaining 20 per cent on the production of flash memory chips, Barrett said. Flash memory chips, which retain their data even after power to them is cut off, are widely used in cell phones and hand-held electronic organisers.

Global demand for computer chips, particularly in high-speed communications, networking and consumer electronics, has been on the rise amid growing demand for cellular phones, pagers, video game consoles and networking products. Craig also said he expects an exponential increase in online business in Japan and urged the country's business community to take a leadership role in promoting international trade through e-commerce.

``One of the ways for Japan to maintain its strong international position in the business community is to (take) e-business leadership and be early movers of the technology,'' Craig told a gathering of Japanese business executives.