2007: Short and Shallow Slowdown

摘要

The market will experience a slowdown in the first quarter of 2007, as supply engendered by capacity expansion this year begins to flood the market. An increase in capital expenditures of 20+% this year will result in new equipment being put into production in the second half of 2006 and in 2007. Semico forecasts that it will take two to three quarters to utilize the additional capacity. As a result, capacity utilization is expected to fall starting in the fourth quarter of 2006, continuing in the first half of 2007 before increasing again later in 2007. This will then serve to stabilize prices once again.