re: I see a very slow recovery and an unusually long up cycle.
Predicting a smoothing out of the cyclicality of this industry, has always proven to be wishful thinking. You could be right, but the entire history of this industry, is against you. Over the years, I can't remember how many different rationalizations I've heard, to (quite convincingly) predict that the next cycle will be long and smooth and gradual and not so volatile. And it's usually the upcycles, not the downcycles, which are predicted to be longer-than-ever-before. Logically, the odds of a stretched-out upcycle are the same as the odds of a stretched-out downcycle, yet I rarely hear that prediction. Except at bottoms. Believing in a long downcycle (bookings in the 500-700M range until 2003) is a realization we are reluctantly brought to, after exhausting all other ideas, and only when the evidence is overwhelming. Believing in a stretched-out upcycle is an idea we eagerly seek to justify.
In order for me to believe in that possibility, there would have to be some basic changes in the structure of the industry. I'd have to see:
1. The time from committing to building a fab, to peak production of that fab, would have to decrease significantly. I don't see any evidence this is happening.
2. Or, the ability of semi execs to accurately forecast demand for their products, 1-2 years out, would have to improve significantly. Again, I see zero evidence this is happening, either. |
