Technology
Takes a Breather
Meanwhile, technology is not a growth sector. During
this time of consolidation, partnering, platform war, and new product development,
investing in tech companies for growth will be difficult. Earnings reports
in the coming weeks will shed some light on company expectations and plans
and may provide clues about which companies are positioning themselves to
be the future growth drivers.
The first clues may come from semiconductor companies:
Intel reports January 14
th after the close – Gain of 14 cents expected.
Advanced Micro Devices reports January 16
th after the close – Loss
of 43 cents expected.
Motorola reports January 21
st after the close – Gain of 10 cents
expected.
Texas Instruments reports January 22
nd after the close – Gain of
3 cents expected.
Technology Takes a Breather as Market’s Growth Driver
Semiconductor Industry as a Gauge
In June I wrote about the semiconductor industry being
a gauge for the direction of the whole technology sector, and, in turn,
for the rest of the market One Gauge
of a Recovery in Technology. I concluded in that article that, if the
forecasts were correct, semiconductors worldwide would have bottomed in
2001, and the bottom for The Americas would come in 2002 sometime, which
would suggest a market recovery underway by now.
As it turns out, the Semiconductor Industry Association’s (SIA) forecast
was partly right:
- Worldwide chip sales did bottom in the last quarter of 2001, improving
in the first quarter of 2002;
- But sales in The Americas fell by -12% in 2002 from sales in 2001.
- The December quarter, typically the strongest, ended sluggishly for
most chipmakers, which makes me question the SIA’s 2003 forecast for growth
of 13.5% in The Americas, if GDP grows by 3.2% for the year.
Revised Conclusion: A recovery in the semiconductor business might
still be a harbinger of the technology sector returning to health. But will
technology again drive the market?
Linda Stewart www.fizone.com
January 13,2002
