"If winter comes, can spring be far behind?" wrote the English poet Percy Shelley. There are many semiconductor executives who might well answer "who knows?" to that question. 1997 has been a disappointing year for the semiconductor industry. For the first time in its 40+ year history, average selling prices declined for two successive years, with the result that instead of bouncing back after the slump of 1996 as it did after the slumps of 1975 and 1985, the world market has grown only a modest 5%.

For ST, however, 1997 has also been something of a remarkable year, one in which the Company's emergence as one of the world's most innovative and respected chip manufacturers was recognized by prestigious awards in Asia, Europe and the USA. These included becoming the first ever European company to win a Best Supplier Award from Sharp, winning the European Quality Award and being selected by the influential magazine Industry Week not only as one of The World's 100 Best-Managed Companies but also as one of seven Powerhouse Companies based on its strong financial performance.

A measure of ST's stature as one of the world's top microelectronics companies is the number of important partnerships it has made around the world and several are highlighted in this issue of Challenge : NEC's landmark decision to design the RIVA-128 multimedia accelerator on the PC motherboard instead of an add-in graphics card; the extremely significant agreement between DAEWOO Electronics and ST to establish a design center company in Korea; BSkyB's selection of ST as its silicon partner; agreements with Motorola, Logitech and Philips; ST's leading role in programs such as ERTICO and MASSC. These, and