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How bad is the recession in Silicon Valley? According to Steve Sanghi, CEO of Microchip Technology: "Shipments running to catch up with real demand can look like growth." After that there is a lot of hard work in real demand creation."
Pravin Madhani, general manager at Mentor Graphics: "When inventory depletes, as in January, you can have a big swing in revenues. Orders in February were better than orders in January, and orders in March were better than in February. The question is: Will it last? That depends on more datapoints. People can see bottom so long-term investors are coming back into the market." That has seen the Philadelphia SOX jump from 188 to over 230 in March.
Venture capitalist Dave Epstein, who featured as an engineer in the iconic book 'Soul of a New Machine', reckoned: "We have worked down inventories to record lows. Inventories are at unsustainably low levels. We're bumping along the bottom, and there's more bad news to come. The stock market will recover before the economy."
Bill Lamie, CEO of start-up Express Logic, was unfazed by the downturn. "We're fine with revenues coming in through our private funding. We're oblivious to it. We see VCs pinging on us trying to get in our doors. But we don't need them."
Agreeing with Lamie that the downturn hadn't affected his company was Wade Patterson, CEO of start-up Synapse Wireless, who said: "The feedback we're getting on venture money is that it's OK for companies which are cash-flow positive. Tough for others."
Dave Epstein, the venture capitalist, saw one upbeat feature of the current scene: "There's no slow-down in innovation", he said, "innovations are coming at the same speed, and same vigour, as in the best of times. Real entrepreneurs can start a company at any time whether in this kind of environment or in a bubble environment."
However the lack of exits is bugging the VC scene. "Semiconductors has been a poor place to invest for ten years, so we semi guys have nothing to do with the downturn. That's the good news."
The bad news is at a personal level. An engineer fresh from stand duty at San Jose's ECS show said loads of people visited his stand asking: 'Are you taking applications?'
David Manners, San Francisco
See also: Mannerisms, the blog of David Manners. Updated twice daily, it's the distinctive, entertaining, authoritative and never dull commentary on the semiconductor industry, from someone who knows. Sign up for the Mannerisms eNewsletter.