"If last year was the hardest year in the history of the industry, this is the second hardest," says Will Strauss, president of research firm Forward Concepts. "It's still a struggle. We're still seeing layoffs; everybody is still cutting costs like crazy."
But the good news is that the industry has put the worst behind it, in more ways than one. The huge inventory glut that paralyzed profits during 2002 has been worn away by time and smart investments in supply-chain technologies. And sales, while still depressed, are on the rise: The Semiconductor Industry Association has predicted 10% growth for 2003--below average but a real improvement from last year's 2% growth.
"There's been a lot of stabilization, and I wouldn't say we're on a smooth-paved road, but we've had the opportunity to get focused," says Ron Roberts, CIO of Agere Systems Inc. "We've had heavy cost reduction, but we're also investing."
Agere's cost-cutting programs include consolidating servers, building new statistical demand models, and creating supply-planning software. Its investments include extensive wireless technology, enabling all its offices and factories with 802.11x wireless networks. That lets employees and customers who visit Agere's plants increase productivity, reduce remote-access costs, and respond to business needs closer to real time.
National Semiconductor Corp. has learned that you can also increase productivity by consolidating the tools employees need to do their jobs. National was a legacy-rich enterprise full of systems that required too much training, CIO Ulrich Seif says. So the company built a portal called One National Environment. By using Web services and open-source platforms, National built a platform that pulls in functions from all its disparate systems.
That sort of strategy is what's helping the industry get ready for an inevitable comeback.
|Rank||Company||Revenue in millions||Income (loss)
|23||Micron Technology Inc.||$2,589||($907)||1,154|
|61||National Semiconductor Corp.||$1,672||($133)||429|
|125||Cadence Design Systems Inc.||$1,293||$72||300|
|140||Brother International Corp.||--||--||--|
|156||Analog Devices Inc.||$1,708||$105||325|
|165||Applied Materials Inc.||$5,062||$269||750|
|200||Fairchild Semiconductor International||$1,412||($3)||350|
|268||Synnex Information Technologies Inc.||$3,800||--||124|
|325||LSI Logic Corp.||$1,817||($292)||310|
|330||Texas Instruments Inc.||$8,383||($344)||1,100|
|428||Agere Systems Inc.||$2,177||($1,811)||352|
|464||American Power Conversion Corp.||$1,300||$82||196|
|487||Cooper Industries, Ltd.||--||--||21|
|Financial data is from
public sources and company supplied.
Revenue is for latest fiscal year.
Employee data is from InformationWeek 500 qualifying survey.