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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Earlie who wrote (73192)	1/10/2000 11:47:00 PM
From: Les H	Read Replies (2) \| Respond to of 132070

Dueling forecasts for chip industry given at conference PEBBLE BEACH, Calif., Jan 10 (Reuters) - The $147 billion semiconductor industry, which has just completed its first year of recovery after a three-year slump, heard different versions of its future at an industry conference on Monday. Two market researchers presented diverging data to an industry known for its boom and bust cycles at the Industry Strategy Symposium, a conference sponsored by SEMI, the semiconductor equipment trade group. IC Insights Inc., a market research firm based in Scottsdale, Ariz., forecast 22-23 percent growth for the year 2000, which is in line with a forecast last October from the Semiconductor Industry Association. The SIA said it is looking for the industry to jump 21 percent in revenues to about $174 billion in 2000. ``Unless there is some big inventory overhang, that is a pretty conservative forecast,' Bill McClean, president of IC Insights, told the conference. He said that there has been some buildup of inventories in selective areas, mostly in the areas of analog chips and programmable logic devices, but the companies using these chips, such as cell phone makers will burn through their excess inventories this quarter. But another market researcher, Advanced Forecasting Inc., put a wet blanket on the rosy predictions, saying that there is an 80 percent chance that another industry recession is just around the corner. ``I'm not going to deliver good news,' said Moshe Handelsman, president of Advanced Forecasting, based in Cupertino, Calif., saying that in the second half of 2000, there is an 80 percent chance of another slowdown. Handelsman declined to divulge the specific factors fueling his predictions, citing proprietary methods, but he did note that the industry is ``overheating again' much as it did in 1995 before the last recession, which started in 1996. ``This industry is notorious for double bookings and not penalizing,' Handelsman said, referring to a widespread industry practice. Last month, analysts said they were afraid that companies who use semiconductors in their products were double or even triple ordering chips, as they stocked up ahead of Y2K, and now some are caught with excess inventories. Separately at the conference, Clark Fuhs, a Gartner Group/ Dataquest analyst, said that he believes that foundries, companies which manufacture semiconductors on a contract basis for chip companies, will become even more prevalent than they are currently, due to the high cost of chip manufacturing. Fuhs said that he believes that 40 to 50 percent of semiconductor manufacturing will be done out of a foundry, versus about 5 to 10 percent currently.