Yes, apparently, a lot of cross-currents in the market. First we hear about order push-outs and then we hear that the supply is limited - companies are working to capacity, etc, etc.
The following article says that chip makers worry about keeping up with demand in 2001 - just released this evening.
<<U.S. chip makers worry about keeping up with demand in 2001
By Mark LaPedus, Semiconductor Business News
Nov 2, 2000 (4:40 PM)
URL: semibiznews.com
SAN JOSE -- For chip and equipment makers, there was good and bad news at the annual Semiconductor Industry Association (SIA) forecast meeting here on Wednesday.
The good news for chip companies was that semiconductor revenues are expected to jump 37% in 2000, followed by 22% growth in 2001 (see Nov. 1 story). Moreover, demand for PCs,
communications equipment, consumer items, and other products remains strong, but a lack of wafer fab capacity, pricing pressures, and otherunforeseen events could impact the overall growth of
the chip industry in 2001, according to top semiconductor executives at a press event on hosted by the SIA.
But still, the signs are positive for 2001, said Jerry Sanders, chairman and chief executive officer of Advanced Micro Devices Inc. "We believe that the PC industry will grow in the mid-teens [in terms
of percentages] next year," Sanders said in an interview with SBN after the press event on Wednesday evening. "We believe that we will grow faster than the industry average."
But not surprisingly, the hottest market for Sunnyvale, Calif.-based AMD and other chip makers is communications. In the cellular phone arena, for example, flash memory continues to be a hot
commodity, Sanders said. "The bit count per phone is going up at a dramatic rate," he said. "But we think that the flash market will be limited by supply next year."
Sanders also agreed with Dataquest Inc.'s projections for the cell phone market. The San Jose-based market research house projects that cell phone shipments will grow from 290 million units in
1999, to 434 million in 2000, and to 567 million in 2001.
"We buy into the 567 million level," Sanders said. "We could see it go up to 600 million units."
Others were a little less optimistic. "We might see 400 million cell-phone shipments this year," said Dwight Decker, president and chief executive of Conexant Systems Inc. of Newport Beach, Calif.
"We're also seeing that the cellular-phone market could reach 550 million units next year," Decker said in an interview after the press conference. "That's still 30% to 35% growth. Next year, it will be
a strong year, but it won't be hyper growth in the market for cell phones."
Decker added that other communications-equipment sectors remain strong, such as routers, switches, Digital Subscriber Line (DSL) systems, and related products. "If we don't grow 50% in our
network-access business next year, I will be very disappointed," he added.
Even the commodity DRAM makers are looking for the communications market for growth. While PC-oriented DRAM demand is sluggish, "the market for DRAMs in communications equipment is very
strong," said Steve Appleton, chairman, CEO, and president of Boise, Idaho-based Micron Technology Inc.
During the SIA forecast press conference, executives said they were not immediately concerned about an oversupply of ICs because demand remained strong and it is still difficult to set up new
production lines due to delays in fab equipment. "There are few signs of over capacity," said Wilfred J. Corrigan, chairman and CEO of LSI Logic Corp. "Stepper leadtimes, for example, are
approximately 15 months. Bookings are strong and leadtimes are long."
Ironically, the lack of capacity will prevent revenues from growing even higher in 2001, according to the executives during the SIA press conference on Wednesday. "Demand [sales volumes] can
never outstrip supply," said Appleton, referring to the inability to ship products that cannot be made. The Micron executive noted that idle capacity was available at the start of 2000 and that made it
easy to respond to a sharp growth in demand this year.
"There isn't a lot of idle capacity now, which means next year demand will be held back by the supply side," added Appleton.>> |
