Barbara - Looks like we have our official motto for 2012: "Not as bad as 2009!" Shall we starting taking bets on how many times we hear this between now and next Christmas? I'm in for $20 that this phrase will be muttered at least 75 times these next few quarters. :-)
Bolaji - Imagine that? Companies being asked for a five-year plan and something they can be accountable for!! Throwing my arms up in praise :-)
Kidding aside, it does seem that most people/companies are going to chalk up 2012 (or at least the first couple quarters) as a decline through which they can manage with some amount of finesse or corporate savvy. Of course, it can spin in any number of directions between now and then, so we'll see how grounded the idea of progressive-minded sanity is within businesses and on Wall Street.
I'm curious about the five-year outlook. Five years feel a little too long to me, and where we would get in some more dicey estimations based on total uncertainty. Three years sound more realistic, true if you will. Given the R&D spending timelines and how boom-bust waves tend to cycle through, three year plans might be a more realistic... three years are just far enough away where you use here-and-now perspective to define and rationalize a workable and sustainable forward-looking game plan.
What do you think? What's the high-tech industry going to look like in 2014-15? What's going into the pipeline now with that near-term future in mind?
"Not as bad as 2009" seems to be the rallying cry for the next couple of quarters. I wish that were more reassuring, but companies are trying to avoid any comments that will send morale in a more downward spiral. I've heard the same from the conference calls I've attended. It would be tough to tolerate another 2009.
Jennifer, I attended an investor conference yesterday in New York and thought it interesting that the focus of most of the discussions was about the next five years rather than about now or even the year ahead. The attendees were more interested in what could be, five years or so from now (that's the farthest they were prepared to look) rather than the 12 months of 2012. They seem to have figured out what their investment strategies for 2012 will be. In other words, a company that is not readying products far into the future won't be on the radar of these shareholders and other investors.
It is very interesting that their tailor-made semiconductor part of the business continues to be robust as there seems to be more specialized projects their customers are working on.This seems that R&D and innovation continues on all fronts.
I'm not surprised by the news, but at least Infineon isn't talking about huge losses and possible shutdowns. With the current global economic mess, it appears that Infineon is staying optimistic and is in the same boat as other manufacturers. It looks like they have some serious potential if they can get the 300mm process up and running.
@Jennifer, the globle economic condition that we are talking about is mainly European and USA. The emerging markets are performing quite well. But the fate of the ecomonic condition is tied to the major spenders. Will we see a sudden or gradual improvement if the European crisis is over? I think there is no credit freeze as far as the loans are concerned so are the companies spending their own money are taking long term loans?
Adding to Bolaji's note, during the call yesterday, Infineon executives mentioned the value of investing more in R&D during a down economy. It's a strategy many savvy companies employ because the lead times between the investment and outcome usually are long enough (nine to 18 months in the case of getting factories up or chips designed into end products) to "distract" away from macroeconomic conditions companies can't control or change while giving companies more perspective about how they want to advance and create long-term sustainability.
As Infineon Bauer cautioned, though, shifting attention to R&D makes the most sense only when you have a clear idea of where you want that R&D to lead, a focus worth pursuing.
Hospice - On the prevention question, I'm not sure if there is a preventative tactic when global economies are in flux. Cycles involve both ups and downs.. that's why they're cycles and not a linear progression. Companies that can figure out to simultaneously stay the course without panicking and find innovative ways of recreating themselves so they stay relevant to the customer are likely the ones with the best practices on this.
Hospice, Companies are cutting spendings and instead pouring money into R&D to get the new product introduction machinery cranked up for when demand shoots up again. This is typical for any downturn. It's certainly difficult determining when economic conditions will improve enough to start reinvesting for growth. The tightening happens in waves: first, there's the belt tightening, then comes the hiring freeze followed by job cuts and hopefully these actions would help the company ride out the storm.
If we should expect the worse to come for the next fiscal year, my question is what actions are being taken to reduce the effects of the economy? When you see problems come, you better look for a preventive cure.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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