Replies to post #232589 on Zeev's Turnips Patch-No Politics (ZEEV)

[marketmaven]

Semico Forecasts New Semiconductor Downturn Looming
March 16, 2004 (10:29 a.m. EST)
By Brian Fuller, EE Times

Phoenix -- The semiconductor industry's return to profitability probably will be short-lived, as a coming slowdown in consumer and IT upgrade spending are conspiring with capacity additions to create another recession in 2005, a top industry forecaster said Monday (March 15).
Jim Feldhan, president of Semico Research (Scottsdale, Ariz.), made that assessment during an upbeat forecast for this year. Overall semiconductor growth should be 27.5 percent this year, with a potential to go as high as 32.5 percent or as low as 20.6. Feldhan offered the outlook at his company's annual Semico Summit conference here. "The stars are aligned for higher [average selling prices] this year," Feldhan said. "We think low inventory is going to magnify the demand. IT spending is unavoidable at this point. But we have to plan for the next cycle." Feldhan listed several concerns for 2005, not the least of which is that it will be the United States' third year of half-trillion-dollar deficits. In addition, 130- and even 90-nm processes will mature next year, increasing total chip yields. "I think [interest] rates will rise in '05. The recessions we have are typically in post-election year. You can build a good scenario that we'll have a recession. We think it'll be a mild one." "The real question is can we continue to grow without irrational exuberance?" he added.