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REAR
VIEW MIRROR
"You call this a Soft Patch?"
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It may be so from the
viewpoint of the Federal Reserve. But, from here, upstream in the
supply chain, it's looking more like a marsh. Yes, semiconductor
shipment growth in the first half of the year was stellar, but the
July shipment report was weak and by early September, several IC
companies had issued warnings. It's beginning to look like we have
the toxic mix of rapid growth in chip sales and slowing growth in
end demand. Inventory levels in the second quarter grew more than
seasonal; it looks like it's getting worse in third quarter.
We'll need a strong growth spurt through the end of the year for
the industry to exit 2004 in a state of good health.
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CRYSTAL
BALL
"The crash of 2005 or, maybe,
2006"
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If
we don't exit the "Soft Patch" post-haste, the odds are shifting toward
2005.
What is going on here? The usual culprits ─ declining consumer confidence
and cautious businesses. The employed consumer is tapped out and employment
growth is sluggish. And, while US corporations' profits have risen
75% in the last three years and they are awash with cash, their memories
of the crash of 2001 remain vivid. No one wants to go through that
again.
So, after a rush of optimism, caution is returning and dampening the
animal spirits. Maybe we are in for a period of digestion?
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ADVANTAGE
FOUNDRY (read TSMC)
"Processes for all applications"
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During
times of uncertainty and caution, investing many millions in an advanced
technology new product may seem too high risk. But adding a high value
feature to a proven product may just be the ticket to higher market
share and profits. TSMC's portfolio of process features in mainstream
technologies allows just such extensions; with, for example, the addition
of RF, non-volatile memory or high voltage capability. Together with
TSMC's companion services, customers can minimize their investment
and speed their time-to-market.
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