f blaring headlines are not enough, the state of the microprocessor sector can also be divined by looking for industry data from the U.S. Census Bureau.
        "Due to the number of large semiconductor manufacturers choosing not to participate in this voluntary monthly survey," read a springtime release, "the Census Bureau cannot currently produce monthly estimates of semiconductor shipments, orders, or inventories."
        Such is the nature of industries in flux, from utilities to high-tech fabs. But not all the news is bad news.

Semiconductor Market Showing Signs of Life

Even if the big fish is not immediately evident, sometimes the ripples are telling. The worldwide semiconductor packaging and assembly equipment market is showing signs of a recovery, although the industry will not return to positive revenue growth until 2003, according to Gartner Dataquest, an IT research and consulting firm.
        In 2001, worldwide semiconductor packaging and assembly equipment revenue totaled US$2.98 billion, a 56 percent decline from 2000. In 2002, the market will continue to slide, but not as badly as the previous year. For 2002, revenue is projected to reach just over $2.7 billion, a 9 percent decline from 2001. Gartner Dataquest analysts say the industry will rebound in 2003 with revenue of $4.2 billion, a 54 percent increase from 2002.
        "In the second half of 2002, the demand for power and discrete packaging will grow," says Jim Walker, principal analyst for Gartner Dataquest's semiconductor research group. "Portable devices are still growing and power management is a key issue."
        Consolidation of semiconductor assembly and test service (SATS) companies will continue throughout 2002 and into 2003. Excess capacity and lack of available capital will make it difficult for second- and third-tier SATS companies to survive. In addition, Gartner Dataquest analysts says the Japanese will accelerate their adoption of the outsourcing model, which began in 2001.
        "As 2002 draws to a close, the industry will finally begin to gain momentum," Walker says. "IDMs and OEMs will begin outsourcing again, which may grow the SATS industry more than 10 percent from the low levels seen in 2001."
        That will be welcome news to a sector replete with downcast forecasts and less-than-expected financial reports, even among industry leaders Intel, Advanced Micro Devices and world leader Taiwan Semiconductor Manufacturing Co. (TSMC).
        Gartner Dataquest also forecasts IT spending for the manufacturing vertical market to total $326 billion in 2002, a 5.5 percent increase from 2001 spending of $309 billion. Although growth in IT spending in the manufacturing vertical industry will be modest for the year, it is a positive change from the 1.3 percent contraction witnessed in the preceding year. The manufacturing industry will continue to experience single-digit growth through 2005, when spending will surpass $407 billion.
        "The economic recession and the end of the e-business bubble have compelled manufacturing enterprises to severely curb year-over-year increases in their IT budgets. In fact, some manufacturing sectors, such as the automotive industry, will continue to reduce their IT budgets this year," says Geraldine Cruz, senior analyst for Gartner Dataquest's IT services group.

High-Tech Employment Put On Brakes In 2001

A recent study by the American Electronics Association (AeA) indicates U.S. high-tech employment rose just one percent in 2001, the smallest increase in six years. The tech industry added 80,000 jobs in 2001, compared to 440,000 in 2000, according to AeA's Cyberstates 2002: A State-by-State Overview of the Technology Industry.
        "The 2001 data vividly demonstrates a trend that began about seven years ago -- namely that the high-tech industry is increasingly dominated by the software sector in terms of jobs and innovations," says AeA President and CEO William T. Archey. "Software industry innovation now permeates all other high-tech sectors, including hardware design and manufacturing. Since 1995, manufacturing jobs have increased by 46,000, while software and computer services jobs have increased by 1.2 million."
        Cyberstates 2002 found that 20 states lost high-tech jobs in 2001. Texas lost the greatest number of tech jobs: a total of 3,000. South Dakota, however, eliminated the greatest percentage of high-tech positions: 14 percent of its entire high-tech workforce. Even amid a significant downturn, California added more high-tech jobs to its economic base than any other state, increasing its work force by 1.3 percent with 12,400 new jobs. In 2000, by comparison, California's high-tech employment grew by 13 percent by adding 113,000 new jobs.
        The report shows that all but four states experienced a decline in venture capital expenditures. Nationally, venture capital funding is down 62 percent. More than half of the states also saw a drop in high-tech exports in 2001.