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

To: Robert who wrote (52569)	9/19/2001 4:36:59 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

More good news: SEMI officials pessimistic about recovery By Mike Clendenin (09/19/01 11:38 a.m. EST) TAIPEI, Taiwan — Officials at Semiconductor Equipment and Materials International are not hopeful that the downturn in orders for semiconductor equipment will level off soon, and said there is no bottom in sight yet for the equipment industry. With the world economy teetering on the brink of recession, materials and equipment suppliers are taking a negative view of any short-term relief. "The consensus is that we will reach a trough in the fourth quarter or later . . . But if the bottom is bathtub shaped, who's to say where the bottom is," said Elizabeth Schumann, director of industry research and statistics for SEMI during the annual SEMI Taiwan trade show. The turnout for the event, usually packed during the course of its three-day run, was as bleak as the outlook for the equipment industry this year. The worst typhoon in decades hit Taipei on Sunday (Sept. 16), canceling the first day of the show and cutting power to many of the exhibitors until the last day. SEMI officials predicted turnout would drop by two-thirds. That set the tone for a gloomy assessment of where the semiconductor industry is headed in the next several months. As of July, the total revenues for the industry were 37 percent lower than the peak during August of last year. "And there is no indication of a slowing in that declining growth rate. August is usually a slow month so I imagine the trend won't take a U-turn. We still seem to be very much in the middle of a contraction in the semiconductor market," Schumann said. There have been some indications in the PC sector that the worst is over, she said, but in communications and networking "the bottom is not visible." That won't come until the middle of next year, Schumann said, citing anecdotal consensus from recent trade shows. SEMI officials said that they are in the process of revising 2002 predictions for the equipment industry after the attacks on the World Trade Center in New York. The new estimates for the industry will be released at SEMI Japan in December. "It's too early to tell what the overall impact will be on the industry," said Paul Davis, vice president for international operations at SEMI. "Lots of people have been scrambling to get parts and supplies around but that seems to have gotten better now," he said. "Certainly if there is a deep impact on the electronics industry then there will be an impact" on the semiconductor sector. Another indicator of the rough times still ahead is the belief at SEMI that IC unit volumes will decrease 15 percent in 2001. "This is very significant because usually we see that even if there is a revenue recession, units of ICs continue to grow," Schumann said. "In 1998, when the industry had its last recession, units of ICs actually grew by half of one percent. It hasn't been since 1985 that there's been an actual decline in number of units shipped from the prior year." At that time, unit shipments dropped about 11 percent. Even the potential bright spots seem dulled by context. Pointing to the ratio of orders to shipments among equipment makers, Schumann said there is a flattening of the orders trend. "That could be an optimistic sign that we've hit the bottom, but if you look at capacity utilization and trends of semiconductor revenues and IC units we don't see the evidence to corroborate that we have hit a bottom at this time," she said. "So we are being very cautious. It could be that the orders may start to pick up again or they may stay at an even maintenance level for the next several months before turning up."