Add this to the pile of bad news emerging from the high-tech sector: For the first time in its history, the PC industry will experience negative year-over-year sales growth in 2001, according to an analyst report issued Monday.

The report, a briefing on Intel by Ashok Kumar, U.S. Bancorp Piper Jaffray market watcher, says "it is clear that technology has entered a global recession" and adds that the firm does not believe a sustainable recovery will occur until the second half of next year.

While a number of analysts have predicted low double-digit or high single-digit sales growth for the computer industry this year, Kumar's view is more pessimistic. "If you do the math, any growth for the PC industry this year is highly unlikely," he said in an interview. He notes that first-quarter PC sales will likely show a 10% year-over-year decline and that second-quarter sales are typically weaker than first quarter. "We would have to see growth in excess of 20% in the second half for sales to end up on the positive side for the year, and that's very doubtful," Kumar says.

Kumar also believes that further interest rate cuts by the Federal Reserve will come too late to save the PC industry from its first year-over-year sales decline. "It takes anywhere from one year to a year and a half before you see the full benefit of a rate cut," he says.

As a result, Kumar in his report warned investors that Intel--the world's largest supplier of microchips to computer makers--could see its stock value drop into the low teens later in the year. By midafternoon, Intel shares were trading down $1.69 at $26.19. Earlier this month, the company warned investors that first-quarter revenue would fall below expectations and said it will eliminate 5,000 jobs during the next nine months. Last week, leading PC manufacturer Compaq said it will merge its commercial and consumer PC operations and cut 5,000 jobs, or 7% of its workforce. Compaq also lowered its outlook for the first quarter of 2001 to between 12 and 14 cents per share, essentially flat with the first quarter of 2000.