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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: kash johal who wrote (86593)	1/11/2000 8:33:00 PM
From: Petz	Respond to of 1573383

For those who need a worry wall to climb over, here's a negative semi industry forecast for 2000: techweb.com Researcher Warns Of Semiconductor Slump (01/11/00, 11:48 a.m. ET) By J. Robert Lineback, Semiconductor Business News During an otherwise upbeat Industry Strategy Symposium in Pebble Beach, Calif., semiconductor equipment executives were hit with an unpleasant prediction. Analysts from Advanced Forecasting stunned the meeting by predicting an 80 percent probability of a significant downturn in semiconductor sales during 2000. The short-term forecast runs completely counter to other presentations being made at the annual executive summit,which runs at a posh golf resort until Wednesday. For example, chip analyst Bill McClean of IC Insights told the meeting that his forecast of 22 percent growth in semiconductor revenue might end up being too conservative. McClean is predicting that chip sales will to $179.1 billion in 2000 from $147.1 billion in 1999. In another forecast at the symposium, VLSI Research on Tuesday will announce that it predicts a 25 percent increase in chip revenue in 2000. The strong growth in chip sales will fuel demand for new semiconductor production systems, said analyst G. Dan Hutcheson of the San Jose, Calif., research company. He is predicting semiconductor equipment sales will grow 27.4 percent, to $37.6 billion in 2000. Analysts at Dataquest also called for a significant recovery in capital spending as chip sales move close to $200 billion in 2000, based on a recently revised forecast. But Moshe Handelsman of Advanced Forecasting repeated earlier warnings of chip markets becoming overheated by double and triple ordering of ICs. The Cupertino, Calif., company's 19-month short-term forecast shows an "elbow" in the trend line during the second quarter of 2000. "This will impact new orders for front-end equipment," Handelsman said. "All I can do is ring the bell." He compared the current situation to 1995, when most industry analysts and managers believed sharp downturns were no longer possible in the chip industry. "Will you keep ramping up like in 1995?" he asked executives, who seemed to shrug off Handelsman's current warning. After several years of extremely strong growth, the semiconductor industry nosedived in 1996 because of too much production capacity. In 1998, semiconductor capital equipment suppliers suffered one of their worst recessions ever, but a turnaround began in 1999 as chip makers began to burn off excess capacity. Advanced Forecasting said its quantitative short-term IC forecast has accurately predicted five downturns since the mid-1980s. One of those slumps -- in 1993 -- was an isolated downturn with only Japan's analog chip segment and test equipment suffering a short-term setback, but the others were major recessions, Handelsman said. After his presentation, Handelsman said the data points in his model leave open the possibility that the 2000 slump will be isolated to specific products or regions of the world. "This is why there is an 80 percent probability of a significant downturn," he said. The next data point will be added to the model on Feb. 10, and Advanced Forecasting said it believes at that time it will be able to fully characterize the scope of the 2000 slump that the research company said is "just around the corner."