More Support for Our Semiconductor Thesis – Stock Market Beat – Our beat is the stock market. Our job is to beat it.

Gartner has noted in a weekly newsletter to clients that the current fall in wafer fab utilization rates for the third quarter of 2006 show a close correlation to events seen in 2004.The current fall – as with the fall in 2004 – was due to higher than expected output in the second quarter and a subsequent rise in inventory levels that then saw chip manufacturers reduce production in subsequent quarters to correct oversupply imbalances.

Gartner believes that we should expect a slowdown in fab capacity in 2007 as inventory is better managed giving the boost to IC sales/prices in 2008.