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To: Paul Engel who wrote (131853)	4/6/2001 11:47:29 PM
From: Tony Viola	Read Replies (2) \| Respond to of 186894

Paul and all, someone a little more optimistic: David Wu of ABN Amro is predicting a V shaped crash-recovery model for semiconductors this time, rather than an L shape. I don't like that L shape because, theoretically, we'd never recover. DUH to the ANALyst that coined that one. - Tony e-insite.net ================================================================================== ] ANALYST VIEW/ ABM Amro predicts V-shaped chip rebound Bridge Information Systems 4/6/01 BridgeNews Bulletins via NewsEdge Corporation : San Francisco, April 5 (BridgeNews) - ABN Amro analyst David Wu disputed another analyst's assertion that the semiconductor industry may be headed for an "L-shaped" recession in 2001, sticking instead to his own view that the chip industry will experience a "V-shaped" rebound. "One of our competitors was talking about a bathtub-shaped or an L-shaped semiconductor recession in calendar 2001 at the Fabless Industry Luncheon ... with a 10% decline for the full year. We claim there must be a mistake because the arithmetic does not work," Wu wrote in the research note. If there is no recovery in the second half of calendar year 2001, the industry will be looking at a decline of around 25%, which is almost twice as bad as the last big inventory glut year in 1985, he added. "We stick with our V-shaped cyclical forecast because the worst of the PC inventory glut is clearly behind after (the first quarter of calendar year 2001), in our view," he wrote, noting that PCs still account for some 35% to 40% of semiconductor consumption. "Given the modest level of excess inventory of wireless handsets in the channel of 10 to 15 million units (less than 2 weeks in a 450 million unit year), this segment should complete its inventory reduction by (the second quarter)," he said. "The wireline related ICs will probably take until (the third quarter) to clear since serious inventory reduction did not begin until (December) 2000," he said. In all, ABN Amro believes that this recession, while painful and extraordinarily quick, is no different from the prior five cycles, which according to IC Insights did not exceed three consecutive quarters of sequential declines. "This should put the trough quarter at the second quarter of calendar year 2001," he said. End <<BridgeNews Bulletins -- 04/05/01>> * * * Top of Page