Reuters
Chip industry will pick up next year- LSI Logic CEO
Wednesday December 11, 8:22 pm ET
By Elinor Mills Abreu
(http://biz.yahoo.com/rc/021211/tech_lsilogic_1.html)
MILPITAS, Calif., Dec 11 (Reuters) - The semiconductor industry recovery is under way but will really pick up next year, Wilfred Corrigan, chief executive of custom semiconductor maker LSI Logic Corp. (NYSE:LSI - News), predicted on Wednesday.
"We've started to come back from the low point. There has been a degree of recovery happening already," he said in an interview with Reuters at the company's Milpitas, California, headquarters.
After falling by nearly half between the third quarters of 2000 and 2001, semiconductor industry revenue has risen about 20 percent since the third quarter of 2001, he noted.
"We've gone through the bottom of the cycle," Corrigan said. "Industry and the customer base are trying to get up from the bottom and that's going to happen next year. I'm sure of it."
"We've gotten rid of the excess capacity. We've gotten rid of the inventory in the pipeline and we've got customers that haven't bought anything for two years," he added.
Semiconductor industry trade groups have predicted that the industry will grow about 2 percent in 2002 and about 20 percent or more in 2003.
On Tuesday, Intel Corp. (NasdaqNM:INTC - News) Chairman Andy Grove said it was too early to forecast a rebound in the sector.
Intel, the No. 1 maker of microprocessors, sells primarily to manufacturers of personal computers.
LSI Logic makes chips, the brains of electronic systems, that are used in different markets including DVD players, set-top boxes, video game consoles, networking and storage devices.
"Intel is governed by the PC industry" and thus has a different perspective on things, Corrigan said.
While sales of chips for DVD players and video games continued to be fairly strong during the latest two-year downturn, sales were down for networking equipment chips, according to Corrigan.
"Consumers have done their part. I think companies will start spending again once they've got confidence. That will happen after Iraq," he said. "By 2004 we'll see significant improvement in the communications sector."
However, Corrigan was cautious to not be too optimistic about a quick recovery, and said that at this point there was no way to be sure things wouldn't decline again in a so-called "double dip recession."
"There's no visibility. Customers are ordering hand to mouth. Until we get the Iraq thing settled, everyone is so nervous; everyone is hanging onto their cash," he said. "Everyone is waiting for the macro environment to change."
He predicted a U.S. war with Iraq would be "short, quick, successful, and then we're into an era of uncertainty." |
