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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Donald Wennerstrom who wrote (42280)	12/19/2008 8:03:10 PM
From: Donald Wennerstrom	Read Replies (1) \| Respond to of 95615

Semi-conductor industry facing bleak 2009 -- panel Thu Dec 18, 2008 4:03pm SAN FRANCISCO, Dec 18 (Reuters) - The semi-conductor industry is bracing for a bleak 2009 as microchip prices drop and once promising clients such as solar panel makers face a major shakeout, a panel of experts said this week. "The reality of the situation is that we're just starting the most significant part of this downturn," said Carl Johnson, director of research for the Infrastructure website. He told a Web panel sponsored by Semiconductor International that chip prices would fall as much as 20 percent to 30 percent because of overcapacity and excess inventory. "We know the memory market is really tanking right now, but at this point it's going to be a broad-based decline," said Aida Jebens, an economist with VLSI Research, who offered a series of pessimistic charts and numbers to back her view. The industry includes makers of memory chips, such as Samsung Electronics Co Ltd (005930.KS), the makers of central processing units, such as Intel Corp (INTC.O) and Advanced Micro Devices Inc (AMD.N), and many makers of analog devices, such as National Semiconductor Corp (NSM.N). Panel members said they were revising sales forecasts, with drops for semi-conductors going to about 10 percent from six percent previously. Equipment to make chips would drop by nearly 25 percent. Automobiles depend heavily on semi-conductors and the downturn in auto sales is hitting the chips industry, the panel said. Separately, other reports out over the past few days said research and development and capital expenditures were shrinking alongside revenues. Panel members said the poor outlook would lead to consolidation. One part of the sector that faces a dismal year is the photovoltaic industry, where enthusiasm has waned with the price of oil, the panelists said. Jebens said there were more than 100 solar panel manufacturers, mostly small "mom-and-pop" operations that will face trouble getting credit. "It is going to be a tough time for the solar panel (makers) this year," she said. The solar panel business will pick up, but not in the next two years. In the meantime, many will disappear. But that was not the last word, Jebens added. "The role of government ... is one of the biggest wild cards in saying just exactly what form the consolidation takes," said Dale Ford, senior vice president of Market Intelligence for iSuppli Corp. He said that applied broadly to the semi market, not simply the solar industry. At the end of the panel Alexander Braun, senior editor of Semiconductor International, said: "All I can wish is that all of you are dreadfully wrong."