WASHINGTON - Requests for H-1B visas reached an all-time high this year, with nearly 163,000 applications received in five days, federal officials said Thursday.

Because of the volume, Citizenship and Immigration Services will conduct a random lottery to award the 65,000 visas allowed by law for highly educated foreign workers. In addition, another 20,000 will be given to foreign citizens with advanced degrees from American universities, under a special exemption.

"This is the best way to be fair to everybody," said Chris Rhatigan, a spokeswoman for USCIS, about the random selection process.

The applications that are not picked will be rejected and returned along with the application fee, she said.

High-tech companies -- faced with the prospect of thousands of rejected applications -- denounced the visa limit.

"U.S. employers deserve better than a random lottery to determine if they can hire the highly educated candidates they need," said Robert Hoffman, co-chairman of Compete America, a coalition of companies that includes Oracle, Google and Microsoft. "Congress has failed to address the problem as U.S. universities graduate highly educated individuals who leave to work in competitor nations. This madness must end this year."

High-tech companies have been lobbying aggressively to increase the cap but have not been successful in recent years. They say that the scarcity of visas deprives them of the best talent and undermines their ability to compete globally. The H-1B visas allow foreigners to work in the United States for up to six years.

Last month, Microsoft Chairman Bill Gates lobbied for more of the permits, which he said are needed to fill engineering, computer programming and other jobs that would otherwise go vacant.

Critics, however, say that the H-1B program depresses wages for U.S. workers and is being abused by outsourcing companies.

Ron Hira, a professor of public policy at the Rochester Institute of Technology, said the program lets companies displace American workers and pay below-market wages.

The hunger of U.S. companies for cheaper labor, Hira said, is one reason that the flood of H-1B applications is not surprising.

Hira said his research shows that 89 of the 200 companies that used H-1B visas the most in 2007 are outsourcing companies.

"The run on H-1Bs is caused by a thirst for lower-wage workers and the rise of the offshore outsourcing industry," he said.

In Congress, several bills would increase the cap on H-1Bs, including one by Rep. Lamar Smith, a Texas Republican and ranking member of the House Judiciary Committee.

Smith's bill would raise the annual cap for H-1B visas to 195,000 in 2008 and 2009.

He said it is an "emergency fix" that would help U.S. companies stay competitive while Congress takes a look at reforming the H-1B program.