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Will this Semiconductor Cycle Be Deep or Shallow?

Electronics and semiconductor executives base critical capex and other management actions involving billions of dollars on how accurately they can predict the industry's sales cycles. They mucked up the last time. Here's how a repeat can be avoided.
semiconductor wafers
Semiconductor wafers

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By Bolaji Ojo

What’s at stake: 
Getting an accurate reading of the direction of the electronics market has always been problematic. Yet, the decisions executives take that end up massively impacting employees, shareholders and customers depend so much on a good understanding and acceptance of the market fundamentals. What chipmakers especially must do to determine the direction of the current cycle is clear. Will they go instead with the typical knee-jerk actions, though?

Inaccurate forecasts are the bane of the chip market. 

Malcolm Penn, CEO and founder of Future Horizons Ltd., a UK-based semiconductor research and consulting firm, comes closest to being the industry’s one true oracle. Penn may not be the only one to generally get chip sales forecasts mostly correct annually. But he stands out.

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