Various alternative scenarios can be drawn by making assumptions about fluctuations in demand trends in end-markets. Lately, descriptions of alternative scenarios have mostly been negative ones, to judge by the preponderance of stock downgrades compared to upgrades, but positive scenarios are also conceivable. Additionally, sporadic failures by companies to execute their strategies may alter the stories for certain companies. But there is a ray of hope here. Remember that, overall, we are still in a golden age for semiconductors.
Chips are ubiquitous and are getting better.
Chips are increasingly becoming critical components in all sorts of equipment. New frontiers for end-markets are still opening up, including automotive markets, smart homes, and handheld information appliances. Manufacturing techniques for chips are incredibly sophisticated already, yet promise to see vast improvements over the next decade. Down cycles in the past have been nasty, but the next one may be milder, given more diverse end-markets than just computing, and more chip foundries in the system, which should mean less overbuilding of capacity. Nov. 2000 Forecast Investors get scared thinking about the cycle risk and downside of the semiconductor business, but here we have the main trade group indicating a huge growth year in 2000, a big year in 2001, and double-digit growth continuing thereafter.