Zeev,
<Right now, however, I fear we are faced with a "double whamo", not only it seems that we are facing over capacity (that article mentioned that most of the capacity increase in the last quarter and year, was from process improvements, not new increases in monthly wafer starts) next year, when the bulge of the cap-ex acquired this year will come on line, we may be faced with a small market contraction due to a possible emergence of an almost simultaneous world-wide recession. (World-wide, in this case, means US, barely a recession, Europe some decline and SE Asia, some real troubles).>
If one looks at it the capex plans for most companies have been put in place in the first half of this year when the demand was driven by the easy money at the internets. With PC unit growth forecasts coming down substantially in the last few weeks the situation has deteriorated beyond what many people thought.
I am optimistic about not having a world-wide recession though - primarily because I am seeing what Internet is doing in Asia and it is nothing less than revolutionary.
<In Mighty Taiwan, Winbond has already cancelled (or pushed out "indefinitely") one of two planned 12" fabs.>
In Korea things seem to be headed the same way. Hyundai hasn't announced anything yet but there is clearly trouble there. I think the "big one" yet to come is Intel's revised capex plans - we may get an update in January.
<If we are, the discussion should really start and move to what would be typical parameters to watch for a bottom in the current down cycle. Other questions that we may want to address would be "is it too late to sell?">
I would welcome such a discussion.
Chuck |
