Sometimes it's downright hard not to paraphrase Dickens. Thought at present chipmakers are mired in a cyclical downturn, the future holds a great deal of promise. Let's get to the bad part first. The semiconductor industry is presently diving to a cycle bottom. Given the many earnings warnings and descriptions of rapid deterioration of orders in February and March by chipmakers and their customers, such as Cisco Systems and Nortel, the downward sequential trend for chip sales is likely to continue into the spring and perhaps beyond.
Trends are also downward for the semiconductor equipment makers.
By October 2000, the ratio had dwindled to a still strong 1.16. The suffering for the investor in the semiconductor sector can be summed up by a quick look at the Philadelphia Semiconductor Index. The index is down from its 52-week high of 1320.69, to a measly 579.01 at the close March 28, 2001. So the industry and the stocks are way down from boom-time levels, with some likelihood of falling a little more. However, with some historical perspective, it is easy to view 2001 as a very bright time for the semiconductor industry and for investors.