You have to wonder whether the majority of 'upbeat' market predictions made since 2001 have been based on fact or wishful thinking.
The fact that many of those original predictions have been 'revised downward' or scrapped altogether suggests the latter.
If you are in the channel there is one thing you can be sure of: you will be paying a lot more and waiting a lot longer for components come the end of the year.
Right now we are lolling in the slack summer season, but the upbeat predictions are already rolling off the production line.
The claims are that the third and especially fourth quarters are when the PC and associated markets will finally begin to pick up for a sustained period.
They may be right, but before the Champagne corks start to pop I should point out that the IT industry could have problems satisfying much of the predicted demand.
This is especially true for components: chips and DRam. Sales since 2000 have been down, which has resulted in intense price competition, leading to low revenues, poor yearly financials and chronic under investment in the fabrication plants needed to supply any upturn in demand.
The DRam industry, worth $30bn in 2000, plummeted to just $11bn in 2001. It is recovering, but the money for fab development has not been there. And there's the rub: the components suppliers are not ready to supply an upswing.
According to analyst iSuppli, DRam shortages could be here by the end of this year. Prices have been rising in the memory market for the past couple of months, mainly because of speculative buying.
Once demand really picks up there will be severe shortages. Any recovery will be hampered by long lead times and spiralling costs.
Other research firms, such as VLSI, have indicated that the semiconductor business will need at least 40 new or upgraded fabs to cope with any boom in 2004.
Even Gartner has warned that fabs soon hitting 90 per cent utilisation for the first time in three years will lead to shortages and longer lead times.
A boom is definitely coming. But if 2004 is the year when customers start to spend again, don't be surprised if you find it hard to get hold of just what they need.
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