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

To: Proud_Infidel who wrote (43618)	3/12/2001 10:55:40 PM
From: Proud_Infidel	Read Replies (2) \| Respond to of 70976

Semi Cycle: Déjà Vu All Over Again Analyst predicts Q3 market recovery By Steven Fyffe Stock watchers have compared the market's manic swings to the twisty plot of a bad French movie, but a happy ending to the current downturn could be as close as the third quarter, according to IC Insights Inc., a market research firm based in Scottsdale, Ariz. However, some financial analysts and industry veterans are not so optimistic. The latest industry downturn looks very similar to previous chip cycles and in the past there has never been more than three consecutive quarters of negative growth, said Brian Matas, vice president of IC Insights. The current downturn started in the fourth quarter of 2000, so if the historical trend proves true, things should start to improve in the third quarter, he said. "I don't want to sugarcoat what's going on out there, but if you look at the past 25 years and what has taken place, it shows that three quarters in a row of negative growth is as bad as it gets," Matas said. "If you step back from today or this week or this quarter, then you see the historical pattern. And if history doesn't repeat exactly, then there is something more dramatic happening." Senior executives at some of the world's biggest chipmakers such as Intel, Motorola, PMC-Sierra and LSI Logic have publicly said they can't predict how long the downturn will last. "The fact that none of us anticipated this … precludes any of us from saying when it will pick up," said Craig Barrett, president and chief executive officer of Intel Corp. (nasdaq: INTC), at the recent Intel Developer Forum in San Jose. "We're looking for a fairly soft landing and a rebound in the second half, but I don't think anyone has a clear insight on that, so we're not giving clear guidance." "You tell me what the stock market is going to do and I'll tell you what the returns will be on our venture capital investments," Barrett retorted when asked about Intel's aggressive $7.5 billion capital expenditure plan. Financial analysts echoed the bleak outlook. Even a market rally last week did little to improve the gloomy atmosphere. "I'm not aware of anybody in the industry that sees evidence of a recovery," said Dan Scovel, semiconductor analyst at Needham & Co., New York. "At this point it is looking fairly bleak across the board. This is much deeper and it's going to be much longer than we had originally thought." "We have seen a bit of a rally in the stock market and Wall Street is betting on a bottom at this point. The problem is how soon will a recovery occur. Nobody has the answer to that question. Probably by the end of this year we should start to see a little life again … and no further than the middle of next year." Others in the financial community said they doubted whether history would repeat this time. Collapsing end-markets could make it harder for the industry to pull itself out of recession, they said.