Certainly true, Bookings have been at a very depressed level for 11 months. The average level is lower than 1996 and comparable to approximately the average level of the 5 months at the bottom of the dip in 1998. Plotting the data on a graph makes it very easy to see.
Having said that, there are possibly some mitigating circumstances. The major one being the attack of 9/11. Another factor is the severe "over inventory" buildup due to the "bubble" in 2000 and the bad headache resulting from that bubble. Also, we have just come through a "recession"(not everyone agrees with that assessment) that tended to slow down a normal recovery cycle.
However, now the recession appears to be giving way to better times, the inventory bubble is lessening, and new technology is needed for the future. The semi-equips, as well as other companies involved with chips, maintained a relatively high level of R&D during the downturn and have delivered prototype equipment/chips. With an upturn in the economy, more production equipment/chips are needed. Saying it another way, much of the equipment presently on hand is not adequate to competitively address the market going forward. It will have to be "retired" and new equipment purchased.
Is it going to happen right away? I don't claim to know, but I'll venture a guess - I think it is coming sooner than most people believe. It is just one small data point, but the recent bookings number of 712K was a nice jump from the previous month number of 645K(it shows up pretty well on a chart), and I think next month will be considerably better. Once we get a little "traction" the speed of bookings improvement should increase I believe.
Don |
