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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: Fred Levine who wrote (6198)	5/27/2003 9:18:47 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 25522

What are the odds for an IC recovery? By Mark LaPedus Semiconductor Business News (05/27/03 07:24 p.m. EST) SCOTTSDALE, Ariz. - What are the odds for an IC recovery in 2003? IC Insights Inc. believes there are three possible scenarios for the volatile semiconductor industry this year, in which the IC market could grow anywhere from 8 percent to 20 percent in 2003 over 2002, according to a new report. In the first and most likely scenario, IC Insights of Scottsdale believes there is a 55 percent chance that the IC market will follow its current forecast--which predicts the worldwide semiconductor business will grow by 15 percent to $138.99 billion in 2003 over 2002. The prediction also calls for capital spending to mirror IC growth. In other words, IC capital spending is expected to grow 15 percent to $31.8 billion in 2003 over 2002, according to IC Insights. IC Insights bases this particular forecast on several assumptions. From a macroeconomic standpoint, worldwide gross domestic product (GDP) must range from 2.6 percent to 2.9 percent. At the same time, SARS must be under control by the Q3 of 2003, according to IC Insights. This forecast also assumes that a “strong” PC upgrade cycle begins in Q4 of 2003. Fab-capacity buys should start in the third quarter of this year, with fab-utilization rates hitting 90 percent or above, according to IC Insights. Pessimistic IC scenario However, there is a 35 percent chance that the IC market will follow IC Insights' pessimistic forecast for 2003. In this forecast, the IC market will grow only 8 percent to $129.784 billion in 2003 over 2002, while capital spending will jump a modest 5 percent to $29.3 billion, according to the report. In this scenario, worldwide GDP is less than 2.5 percent. SARS would begin to impact the industry in the third quarter of 2003. Even worse is that the PC upgrade cycle and fab-capacity buys are now pushed out until 2004, with fab-utilization rates ranging below 90 percent in 2003, according to the report. Optimistic IC scenario The odds are smaller for IC Insights' most optimistic forecast, which believes there is a 10 percent chance that the IC market will grow 20 percent to $144.369 billion in 2003 over 2002. Capital spending would jump 25 percent to $34.7 billion in this forecast. In this scenario, worldwide GDP is greater than 3 percent, with no impact from SARS. Both the PC upgrade cycle and fab-capacity buys would start in Q3 of 2003 and that fab-utilization goes above 90 percent for all of 2003, according to the report.