Wednesday, January 12, 2005
*First Things First: A Straight to the Point Review* Have to say that I don't really feel like looking back on 2004 - particularly when I look at the stocks. It's got to happen though - even if it is painful. We all know that business in '04 was not that bad for those in the electronics, chip and chip equipment industry. In fact, if you just look at the year-over-year sales comparisons you could say that it was a great year. I mean, 50% up or so for capital equipment and almost 30% for total semiconductor sales are gains you can hardly sneeze at. The gains are nice but it never fails, when you think you've safely left the forest your compass breaks and it only takes a few wrong turns to find out that you are still lost in the woods. Ahh.... Nothing like a strong upturn to kick off the year and swoon at the end to leave you scratching your head. The smell of napalm in January..... Yes, we're entering '05 in the midst of another dowturn. Whether it turns out to be a U, V, W or canoe shaped recovery remains to be seen (see the 12/7/04 Chart Watch for some comments on the shape of the recovery). I know you all know is rough out there. The depth and breadth of this down cycle (rather amazingly some still do not believe this is a downcycle) is still one big fat question mark. Like you, I am hopeful that it will turn out to be a blip on the radar screen. I see plenty of good things happening with products for the end market but in terms of the investments that will be made by chip and chip equipment companies there is still doubt as to how 2005 will unfold. I am not alone. Many others feel the same way. As the post-holiday reports roll in we'll learn a lot more. The rest of my comments, if you have not received them via e-mail, are available in the Letters Archive...... More will be posted soon. So, stick around.