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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (42525)	2/22/2001 4:26:26 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

Forecaster says chip market will show virtually no growth in 2001 By Robert Ristelhueber EBN (02/22/01 12:48 p.m. PST) SAN JOSE -- A prominent market research firm has cut its chip industry forecast for the second time this year, and now expects the semiconductor industry to register almost no growth at all in 2001. VLSI Research Inc. here this week dropped its growth projection for the worldwide chip market to a scant 1.2%. Only last fall, the firm had forecast 11% growth in 2001, but cut that figure to 5% in January. "It's going to be tough year," said Dan Hutcheson, president. "The No. 1 reason is that the economy is much sicker than people are predicting. I think the evidence is starting to look like we're in a recession." Whatever growth the chip industry experiences this year will likely come in the fourth quarter, he said. "Historically, we've never seen downturns that lasted more than two quarters," Hutcheson said, but warned that it wouldn't take much for the industry to show negative growth in 2001. "Everyone is saying that things will turn around in the second half, but a lot of that is wishful thinking. If we get into a really hard macroeconomic climate it could be tough to pull out of it." Hutcheson also trimmed his forecast for growth in the semiconductor equipment market to 0.2%, down from last month's revised figure of 0.5%. Last fall, the firm was predicting 4.5% growth for the equipment market, following a torrid 89% growth in 2000. The Semiconductor Industry Association (SIA) hasn't yet issued a revised forecast for 2001, although earlier this month it said the industry is "unlikely" to achieve the 22% growth target the trade group established last fall. Reflecting the deteriorating outlook, chip companies are rapidly scaling back their capital expenditures. Orders for semiconductor equipment plunged 21% in January from the previous month, and many chip companies are slowing their capacity expansion plans. On Wednesday, Micron Technology Inc. confirmed it was delaying the opening of a 300-mm wafer fab in Lehi, Utah, because of the stalling market (see Feb. 21 story). Subject 50522