Product category:
Communications ICs (Wired)
News Release from: Agere Systems
Edited by the Electronicstalk Editorial
Team on 16 August 2005
Let the good times roll (again)
The industry is rolling again with good times, happy days and renaissance, argues Dave Sonnier, Chief Technology Officer, Agere Systems.
"Let the good times roll" was the title of a hit rock song by a talented group called The Cars They let the good times roll when I was in college during the 1980s
This article was originally published on Electronicstalk on 24 Oct 2002 at 8.00am (UK)
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Fast forward some 20 years: I read a "Let the good times roll" headline in a 4th August 2005 Electronics News story about improvements in the US economy.
According to the report, the gross domestic product forecast is being marked up "sharply" for the second half of this year.
The article links this positive news to the strong upward swing in electronics industry growth.
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"The consensus outlook a few months ago was for about 3% to 3.2% growth".
"Now it looks to be at least a percentage point higher, maybe much more".
"There will be a magnified impact on capital investment at this stage of the cycle when there is little spare capacity - manufacturers will begin recognising that their market potential is bigger than they thought".
"Q3 profit gains will be very large".
These positive prognostications are good news for the semiconductor industry, especially when riding on the same wave as similar stories published during the past few weeks.
The 3rd August issue of Electronics Weekly, for example, conjures up memories of another old song I've heard.
The headline: "Happy days are here again", reports that an "industry consensus is that happy days are here again for the semiconductor industry".
The article quotes Malcolm Penn, CEO of research firm Future Horizons, saying the third quarter of this year "could be the strongest shipment quarter in the industry's history".
Future Horizons' forecast of 15% growth this year and 20% next looks closely at the industry fundamentals.
"There's a tight linkage between the general economy and unit demand", the article quotes Malcolm Penn.
"With world GDP [gross domestic product] growth estimated at 4.4% in 2006, after a 4.3% rise in 2005 [when average annual GDP growth is 3.4%], unit demand should continue on the 10% CAGR we've seen over the last five years".
The article concludes with this upbeat message: "The outlook for semiconductor markets in 2005 to 2006 is uniformly positive".
"Low capex, high fab utilisation, rising prices and above average GDP growth delivering strong unit demand".
These positive sentiments are reinforced in a recent Business Week article with yet another striking headline: "Ready for a tech renaissance?".
The article provides multiple examples of how the information technology industry has finally gotten itself moving again after suffering through several tough years.
"It appears the tech sector is finally getting back on its feet", wrote Steve Rosenbush, a reporter with the magazine.
"Tech companies are posting solid revenue and earnings growth, industry analysts are raising their forecasts for the coming year, and investors are coming in a big way".
The article cites semiconductors as likely to be one of the biggest winners during this upswing.
"The market for semiconductors and semiconductor-equipment makers, a leading indicator, is already sizzling".
"Communications equipment could be poised for the next big run-up".
"Capacity utilisation in this sector, hardest hit from the tech crash, is still in the 60s, well below its historic norm".
"There's room to boost production".
The article cites telecomms as "delivering a wide range of new products, such as wireless smart phones that can handle real time e-mail as well as music and video".
Adding to this upbeat trend, EE Times reported in a 1st August article this headline: "SIA upbeat on June's chip market numbers".
The article lead with this: "The US Semiconductor Industry Association saw signs of stronger growth coming in the second half of 2005".
The article quoted SIA President George Scalise saying: "Last Friday, the Commerce Department reported second-quarter GDP growth of 3.4% - an indication of continued strength in the US economy and a very good sign for the semiconductor industry".
It's been four years since I read so many positive headlines about this industry in so short a period of time.
Yes, let the good times roll.
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