A good time, that is, if your investing horizon is longer than three to six months. The real turnaround in these stocks should begin sometime in the third quarter, according to Boucher. Which is why you should buy a little at a time, particularly on market dips. This industry will have steady growth long term. Before diving in, remember that all chipmakers aren't created equal.
Different companies respond to the ups and downs of different end-user markets.
Sales of less sophisticated chips that are used to regulate the power supply in a clothes dryer or make your car window roll up will come back before sales of those used in fiber-optic telecom networks. It's fair to assume that the sectors that crashed first should recover first, since they began working off their excess inventory the soonest. In the fourth quarter, wireline communications followed, and now it's digital consumer products. Although PC sales haven't yet bounced back, the orders computer manufacturers have given to chipmakers show that demand is no longer dropping the way it did in 2000. Marshall expects PC unit sales in 2001 to be about level with 2000, even though the total dollar volume might be lower due to discounting to get rid of inventory.