Robert Castellano

Semis' Downturn - Which Companies Will Survive, Part 1

I pointed out in a Seeking Alpha article that there is no longer a correlation between semiconductor growth and equipment spending. seekingalpha.com/artic...
Since 2001, semiconductor equipment have been smarter in increasing the number of chips made without a corresponding increase in equipment spending. The major reason is the movement to 300mm wafers, responsible of a 2.25x increase in chips made for the same number of 200mm wafers.

There is a loose correlation between GDP and semiconductor production. The greater the growth in the economy, the greater the spending on technology. Our analysis at The Information Network (theinformationnet.com) suggests that with a worldwide GDP growth rate of 0.5 (International Money Fund's January 28 2009 forecast), the corresponding decrease in semiconductor sales will be minus 32%. Look for a more complete picture in about a week in Seeking Alpha.

Kirk, I love your comment about Gartner (by the way I read your comments regularly in Silicon Investor. I have been competing with Gartner since I started The Information Network in 1985. I couldn't agree with your blog more. Problem is Gartner has this quadrant system where they promote companies. As these companies want to get on Gartner's good side and be in the right quadrant, they continue to spend money on their market analysis, even though it may be wrong.