The semiconductor industry, which suffered its worst year ever in 1985, should begin to rebound this year, but the climb back to prosperity will be much slower than the fall, a leading analyst told industry executives Tuesday.
The turnaround will be so slow, predicted Jack Beedle, president of In-Stat Inc. of Scottsdale, Ariz., that sales for 1986 will still be nearly 4% below the depressed levels of 1985 when the nation's semiconductor makers sold an estimated $8 billion worth of silicon chips and other electronic parts.
Beedle's predictions before the Semiconductor Equipment and Materials Institute meeting in Newport Beach offered the most pessimistic outlook yet for the volatile semiconductor market, the segment of the electronics industry most subject to feast-or-famine cycles. Other forecasters have predicted 1986 sales increases of 5% to 25% for the tiny components that can be found in everything from supercomputers to dishwashers.
Key Ratio Rises
Despite Beedle's dire forecast, the Semiconductor Industry Assn. reported this month that its "book-to-bill" ratio, its key indicator of incoming sales, rose to 0.98 in December, its highest point in 16 months. The ratio means that, for every $98 worth of new orders, or bookings, manufacturers shipped, or billed, $100 worth of products. The figure had been hovering around 0.65 for much of 1985, showing how few new orders were being received.