No more boom and bust. Evah


OK, that's almost certainly a lie. But an upbeat missive from Frost & Sullivan claims that, for the first in its history, the semiconductor industry might cruise through a US recession. Malcolm Penn of Future Horizons has long argued that the semiconductor industry can create its own recessions even in times of economic boom but that it never breezes through a recession.

Frost & Sullivan claims that the rise of Asia as a consumer market in its own right will prevent the semiconductor industry from being dragged down by a poor US market. Also, the prospect of a US presidential election should help the economy there. However, it's worth bearing in mind that the wheels last came off the technology sector when Bush and Gore were arguing over hanging chads.

I take the view that the Asian consumer market is much more sensitive to conditions in the West than it currently seems because Asian economies are export intensive. But, maybe, confidence in Asia can outrun a Western recession.

If the optimistic scenario turns out to be the case, it would be one of the last elements that link together the entire semiconductor industry which, according to Bill Maclean of IC Insights has fractured into four or five segments that operate according to their own boom-and-bust cycles, resulting in the overall business growing at a moderate but more consistent rate.