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

To: Johnny Canuck who wrote (34801)	10/18/2001 11:12:29 AM
From: Johnny Canuck	Respond to of 69967

Market Forecast Revised Again In the aftermath of the September 11th terrorist attack on the World Trade Center, it is now evident that the U.S. economy is headed for a recession. In looking over the semiconductor market overall, we have lowered our projections for the monolithic integrated circuit portion of that market from a 25% decline to a 30% drop for 2001. Unfortunately, DSP growth continues to be in lock step with the overall semiconductor market "train wreck," and Forward Concepts forecasts is lowering its forecast to a 30% drop in DSP shipments in 2001 to the $4.3 billion level. We have also lowered our 2002 DSP shipment forecast to 32% from our earlier 35% projection. Our revised forecast is presented in the table below: PROGRAMMABLE DSP CHIP SHIPMENTS $Millions, worldwide '00 '01 '02 '03 '04 '05 CAGR $6,142 $4,299 $5,675 $7,548 $9,888 $12,854 16% One Big Negative Wireline communications, including telephony infrastructure equipment, has been the major disappointment this year, and will continue to be a drag on DSP sales through the second quarter of 2002, in our opinion. One exception appears to be for IP (Internet Protocol) PBX systems and IP Phones. Although Cisco and 3Com are the market leaders, these DSP-enabled products are tough to pick out of the overall revenue declines reported by the two companies. Some Bright Spots The cellphone market inventory glut has pretty much disappeared and revenue growth in this segment was positive in the third quarter for both Motorola and TI. Guidance from both companies is for continued improvement in Q4, thanks to 2G shipments to China and GPRS shipments to Europe. However, the first half of 2001 was such a cellphone disappointment that we have lowered our forecast of cellphone shipments for the full year to 390 million units, down from the 416 million that shipped last year. Of last year's cellphone shipments, though, it now appears that only about 380 million actually reached customers, compounded by DSP chip shipments that overshot the 416 million mark by another 20 million or so, leading to the inventory problem that was clearly evident by the fourth quarter of last year. The only other big market (more than 100 million DSPs) that has shown flat to slightly positive growth this year is for hard disk drives. That's because the disk drive manufacturers had their inventory glut last year. Other DSP markets showing positive growth this year are smaller, like digital still cameras (a 17-million unit market this year, growing some 57% over last year) and MP3-type Internet audio (now going into portable CD players, camcorders, digital still cameras and cellphones as well as traditional flash memory players). If you'd like to discuss this further, send me an email or give me a call. Will Strauss wis@fwdconcepts.com