IC industry reaches 'turning point' as market moves past trough, says report
Semiconductor Business News
(12/17/01 13:54 p.m. EST)
CUPERTINO, Calif. -- In what was described as the "turning point" for the beleaguered semiconductor industry, the IC downturn has finally reached and surpassed the bottom, according to a new report from Advanced Forecasting Inc. here today.
According to the company's IC Recovery Index, the semiconductor industry hit the bottom in October, and now, is slowly but surely moving in a positive direction. The IC Recovery Index tracks specific short-term data points in the chip industry.
The IC industry is also expected to recover in 2002, but the business will rebound at a slower pace than previous years, due to the weakness in the economy, according to Advanced Forecasting.
Right now, however, the IC market has finally reached the "turning point," declared David Crume, director of sales and marketing for Advanced Forecasting, a market research house based in Cupertino.
"While many analysts are still predicting doom and gloom for the semiconductor industry, we are now advising our clients that the bottom has already happened," Crume said. "This month, we are reporting that the latest data point of our short-term IC Recovery Index is in the positive direction," he said.
The market research firm also insisted the business has turned the corner in spite of an onslaught of bad news in the business. For example, Applied Materials Inc.--the bellwether in the semiconductor-equipment sector--last week announced it will reduce its global workforce by 10%, or 1,700 positions, in response to the continuing downturn in the semiconductor industry (see Dec. 12 story ).
"In response, we have received positive feedback from our clients, suggesting some see improvement in market conditions, and Applied Materials' action is consistent with a similar layoff at the bottom of the 1998's recession," Crume said, referring to the semiconductor downturn in 1998.
The current downturn is much different than in 1998. At that time, the IC industry made a full and quick recovery. "The economy is very weak right now," Crume said. "This will impact the strength and recovery of the industry in 2002." |
