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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (34672)	10/7/2001 4:17:29 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 70549

Seasonal pattern slows decline of chip sales By Will Wade EE Times (10/04/01, 12:22 p.m. EST) SAN MATEO, Calif. — Worldwide semiconductor sales slipped again in August, but the market showed signs that the pace of decline is slowing. Industry analysts did not see this as any reason for optimism, however. Sales in July were down 6.4 percent from the prior month, but according to the latest sales report from the Semiconductor Industry Association (SIA), the market dropped only 3.4 percent in August, to $10.49 billion. Analysts attributed the modest strengthening to normal seasonal patterns and noted that the figures do not reflect the massive market turbulence that has occurred since the Sept. 11 attacks on New York and Washington. The August figures were 42 percent lower than sales in August 2000. The Americas region showed the worst decline, falling 55.3 percent from a year before. Europe was down 40 percent and Japan dropped 36.3 percent. Asia showed the least decline, falling 31.7 percent. "The reduced sales level continues to reflect the slow economic activity in the world's major economies, combined with excess inventories in the information technology market," SIA president George Scalise said. "Consumption continues to deplete remaining inventories throughout the supply chain, and we believe that the inventory correction will be largely completed by the close of the September quarter." 'Normal seasonal behavior' The slowing decline was no reason for optimism, said Eric Chen, semiconductor equity analyst at investment banking house JP Morgan in San Francisco. "Despite the fact that we are seeing apparent signs of improvement on a month-to-month basis, we believe that most of this improvement is attributable to normal seasonal behavior," he said. SIA's Scalise agreed, pointing to the traditional bump upward in chip sales for electronics devices sold during the critical holiday sales period. But they both pointed out that the semiconductor market will be affected by the economic ripples that continue to expand outward from last month's terrorist attacks upon the World Trade Center and the Pentagon. "We do not believe this could be a major driver [for the semiconductor industry]," said Chen. In fact, many of the high-tech industry's major players are concerned about the long-term impact of the attacks upon the overall economy and on the semiconductor sector. "The underlying demand from the consumer is still there, but the key is whether people think they will have a job tomorrow," said Ken Schroeder, chief executive officer of KLA-Tencor Corp., speaking recently at the Semiconductor Equipment and Materials International annual awards dinner. Schroeder said this slump has been driven primarily by a lack of demand, and the turbulent economic and political situation will only make that worse.