The analysts are now starting to be more pessimistic, (link requires registration) recognizing that the high growth in the first part of the year was based on over-forcasting:
Who is achieving the phenomenal sales growth in 2004 that is driving the 40.3 percent growth year-on-year for the second quarter of 2004? Intel's second quarter...was only up 18 percent.Exactly. The foundries had huge growth rates the first part of the year while the actual sellers of chips are seing moderate growth to even sharp declines. My own industry - semiconductor packaging - is caught in the middle with die being thrown at us by the fabs and the end customers cutting back on demand.
We cannot expect to see even higher growth for the chip market in the third quarter. At some point the Asia-Pacific region, which is driving the overall market, has to cool. And the ordering of the numbers, with the general market ahead of the foundry market, suggests that the foundries are leading the market.
I don't think it is catostrophic at this point, and I think the inventory and supply chain problem will work itself out, but I think the back half of '04 is going to be tough for most of the tech sector.