Goodmorning Jerome,
Thanks for the clarification. I'll leave this topic off for now. There are many reasons why the world is the way it is <g>.
I think one of the best interviews I've read this year was the one with TER's CEO. In it he points out two things. One is that in this industry the greater the feast, the greater the famine, and vice versa. The other, and more importantly IMO, is that the bottom is when you begin to see capacity buying (as oppose to technology buys). He goes on to say he has not seen any capacity buying yet (so no bottom that he sees). He also mentioned that 2000 was a great feast and that the capital spending growth far outpaced the chip production growth.
I believe him and I think even if the order decline has bottomed (which I doubt), it'll be some time before we actually see a rise in revenue. Take a look at this news from a packaging company for example:
Advanced Semi Sees Revs Down 20-25 Percent
NEW YORK (Reuters) - Advanced Semiconductor Engineering Inc. said on Tuesday it expects consolidated revenues for the second quarter will fall by 20 to 25 percent from the first quarter due to weaker-than-expected consolidated revenues in April and May.
The Taiwan-based company, which is the world's largest semiconductor testing firm, expects its gross margin to be slightly better than 10 percent, while its operating margin to be in the negative low single-digit-percentage range.
Advanced Semiconductor said given uncertain conditions within the industry, visibility into the rest of the year remains limited. It did, however, say that it remains ``cautiously optimistic'' on its prospects in the second half of the year.
As a result, the company said revenues may start to grow sequentially going into the third quarter of the current fiscal year, leading to improved profit margins
On the timing issue, I tried to look at average duration of semicap cycles since 1992. The previous top was so high that it makes me wonder if we'll break trading range any time soon. At best I think that'll take another 2 quarters.
BTW, I am looking for the average growth rate of the chips and the capital spending over the past decade. If anyone has that handy, I appreciate it.
thanks,
ST |
