Saratoga, CA - November 10, 2003 -- In its latest forecasting issue, published today, Advanced Forecasting warned its clients that an inevitable repetition of the year 2000 Boom-to-Bust looms on the horizon for the Silicon Cycle. The purely quantitative forecasting group warned that the next roller coaster ride will be similar to the just ended cycle with the potential for an equally painful recession if industry leaders do not exercise caution.

The latest recession from which the semiconductor industry emerged was the cold shower on the euphoric boom period of Year 2000. IC Worldwide revenues grew 36% in 2000 over the previous year, followed by a 33% decline in 2001. "We learned one important notion from the bubble - not to extrapolate," mused Rosa Luis, Director of Marketing and Sales for Advanced Forecasting. "Extrapolations caused a huge build up of over-capacity that triggered a devastating recession. They are the worst forecasting tools to predict a change in direction. This is exactly what trapped the industry in 2000 (not to mention 1984, 1988 and 1995)."

It has repeatedly been said that the industry will never again experience the same growth and revenues of the memorable 1999-2000 period. Advanced Forecasting does not agree with this assessment. "Our forecasts have indicated for almost two years that the industry will be situated at the foothills of a major upswing in the second half of 2003, and shall later reach 2000's heights," said Luis, noting that the same forecasts accurately predicted 90% of the major oscillations of the Silicon Cycle since 1986.

In a recent lecture to members of the National Electronic Distributors Association in Chicago, Dr. Moshe Handelsman, founder of Advanced Forecasting, emphasized the inevitable consequences of another recession. "The IC industry will surely celebrate the longer lead-times and fatter margins by applying the usual extrapolations, as they did in 1984, 1995, 2000," said Handelsman. "We should focus more on the human aspect of the problem, the breadwinners whose jobs are doomed due to those extrapolations that lead to an exaggerated buildup of workforce and equipment, ending with layoffs and over-capacity, a-la-1985 and 2001."

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