''We may have seen the bottom of the slump'' Gwennap said, ''but it's going to be a year or two before we see things actually get better. First companies have to eliminate the overcapacity situation, then they have to return to profitability, and it's only after that they will begin to start ordering new production equipment again.''
Yet some indicators, independent of Intel, are starting to pick up.
While semiconductor companies are suffering through a tough August and September, Dehanna is predicting that in November the book-to-bill ratio will reflect positive growth with $107 in new orders for every $100 worth of product shipped.
And companies -- and countries -- are starting to address the fundamental problem of too much capacity, analysts said.
''You're seeing Korean and Japanese companies take production off-line in order to reduce capacity,'' Gwennap noted. ''I'm aware of five mega-fabs that aren't producing at full capacity. And that's a good thing.''
And the industry, however fitfully, is starting to benefit from those moves.
Last week Micron Technology Inc. -- the largest U.S. manufacturer of memory chips following its acquisition of Texas Instruments' DRAM operations -- raised prices for its 64-megabit memory to more than $8, up from $7.60 just a few weeks ago.
**Morgan Stanley financial analyst Jay Dehanna
**Lynley Gwennap, editor of the Microprocessor Report, a San Jose-based industry newsletter |
