Jess,
In response to...
What then of semiconductor equipment companies?
Everything will have IC's. This movement involves much more than DRAM and MPU's, or even telecommunications. That's why I (sadly) sold half of my Intel today, to move to a larger cash position to scoop semi-equip makers going on sale now. Sure, we'll have to wait 6-12 months. Did you see the posting from Jurgis, immediately previous to yours? Note bold type:
SGS-Thomson sees semiconductor upturn
By Corinne Bernstein
May 18, 1998, TechWeb News
Aix Les Bains, France- SGS-Thomson Microelectronics predicts
that the worldwide semiconductor industry will grow a scant
6% in 1998, but sees the ingredients for gradual improvement
later this year.
"A few years ago, we said that the current cycle was the worst, and we are confirming that," said Jean-Philippe Dauvin, group vice president and chief economist for SGS-Thomson, at a press briefing here last week.
Price pressure and overcapacity, soft demand in the Asia-Pacific region, a slowing of exports from that region to Japan, and a softening in U.S. production of PCs led to a disappointing first quarter for the industry, after only 4% growth in 1997 and a 9% decline in 1996.
Market growth should resume in the second half of the year as a result of a better balance between supply and demand, and because of gains in production of electronic equipment, Dauvin said. By the end of 1998, non-DRAM production capacity will be in line with demand, but the supply-demand equation will remain unfavorable for DRAM makers, he said.
Chip makers in Japan and other Far East countries have cut capital spending, while U.S. and European vendors have increased or maintained their capital expenditures, Dauvin said.
The worldwide semiconductor industry's capital investments will drop 14% this year, after a 10% decline in 1997 and a 13% gain in 1996. Dauvin warned, however, that companies falling behind in their capital expenditures will lose market share.
The semiconductor industry will need to add 35 fabs a year to accommodate growth in the next few years, said Joe Grenier, vice president of the semiconductor sector at San Jose-based Dataquest Inc., who also spoke at the SGS-Thomson press briefing. He predicted that the market for electronic equipment will expand to $1.25 trillion in 2002 from $910 billion in 1997, and that semiconductor sales will nearly double to $288 billion from $147 billion.
The computer, communications, and consumer-electronics equipment markets will continue to account for 70% of semiconductor demand, but computers will represent a smaller share in the years to come, Grenier said.
The new drivers of the semiconductor market in the next five years will be digital video, smart cards, automotive multimedia, digital mobile phones, computer peripherals, automotive powertrain devices, and digital networking, Dauvin and Grenier said.
Copyright (c) 1998 CMP Media Inc. |
