South Korea has more going for it this year than the soccer World Cup. I believe it will also be the nation to lead the rest of us into economic recovery next year. On a recent visit to Korea I observed firsthand a rush of corporate and consumer confidence unlike anything we are experiencing in the United States. This is due in large part to the country's lead in developing the next-generation handsets needed for smart phones, as well as the strengthening memory market, essential for the high-speed picture processing associated with HDTV.

Financially also, Korea is well ahead of its Asian counterparts with first-quarter economic growth of nearly 6 percent, $52 billion in foreign investment since 1998 and unemployment at just 3 percent. Once-dowdy Samsung is just one Korean superstar, having come from nowhere to sell 29 million cellular handsets last year, capturing 10 percent of the world market.

I expect Korea's rising fortunes to be quickly followed by those of Japan, the United States and finally Europe. The worldwide recovery will be in full swing by next fall. A big reason why other regions will lag is the need to digest excess bandwidth built up during the telecom boom of the past two years. Obviously, the overcapacity has led to a decline in revenues for networking-hardware manufacturers, their semiconductor suppliers and my business, EDA. As the bandwidth takes its time being absorbed, the need to upgrade the hardware is diminished, leading to fewer design starts for at least 12 to 18 more months. Undoubtedly, the next year will be tough, with more discomforting layoffs and continued belt tightening.

Taking this and other factors into consideration, the Semiconductor Industry Association is forecasting semiconductor-market growth rates of just 2 percent this year, followed by 23 percent in 2003 and 21 percent in 2004. Besides memories and smart-phone handsets, other products will stoke consumer demand, including PDAs, DVD players, satellite radio, automobile telematics, MP3 players and probably a product category or two we haven't invented just yet. Expect to see Japanese stalwarts, such as Sony and Matsushita, develop and own some of these markets or their hybrids. Adding to the recovery, old standbys-like volume corporate buys of PCs and laptops-will eventually pick up. Not even a 486 can live forever.

This recovery will be different in many respects from previous ones. I call it a bathtub recovery-a steep slide down to a flat spot, followed by a long time in the trough before we get our heads above water again. I think we'll have another five years of modest to slow growth overall to work through before we can close the book on this high-tech downturn.