SAN JOSE -- At last year's Intel Developer Forum (IDF), the personal computer community and Intel Corp. were in high spirits amid strong growth in the worldwide computer and semiconductor markets.
At last year's event, Intel demonstrated some real and amazing showstoppers, including the world's first 2-GHz Pentium 4 processor and its new XScale embedded RSIC architecture.
At this week's IDF event, it was a completely different story at what could be called the "Intel Depression Forum." This time, in San Jose, a somber mood hung over IDF, reflecting the current state of the PC, communications, and chip industries--depressing.
One sign of the times was that there were 4,000 "paid" attendees at this week's IDF event, down 15% over last year's show, according to an Intel spokesman.
But sadly, there were few--if any--real showstoppers at this week's IDF. It also does not appear that Intel's existing or future chip products will be enough to revive the troubled industry--at least in the short term.
Intel did demonstrate a 3.5-GHz Pentium 4 processor at the developer's forum, but the industry yawned when the company announced it had begun shipping a 2-GHz Pentium 4 chipin volumes (see Aug. 27 story).
The Santa Clara, Calif., company also announced that it is just now getting around to the sampling phase for its tardy XScale chips, which are based on a new version of its StrongARM embedded RISC processor line.
But there are even more troubling signs for Intel and others. While Intel claims that it is beginning to experience some seasonal demand for its microprocessors, the current Pentium 4 chip is far behind the company's own shipment projections for the year, according to analysts. What's more, consumers or end users do not appear to be scrambling for systems based on the company's future MPUs, including its code-named McKinley and Northwood chips, according to analysts.
Simply put, the PC market is "anemic," observed analyst Dean McCarron of Mercury Research Inc. in Scottsdale, Ariz. "The PC market is better off than communications," McCarron said. "But we don't see a recovery in PCs until the second half of next year," he added.
As a result, there are no signs of a real recovery for suppliers of microprocessors, graphics ICs, DRAMs, and related chips, according to analysts attending Intel's conference this week.
That appeared to be evident during IDF. But perhaps the most interesting events at IDF were not at the show itself, but rather what was going on outside the conference.
Serving as a backdrop to the IDF conference were a series of troubling events during the week--many which do not bode well for Intel or the rest of the electronics industry.
It was a real horror story:
The wind went out of the IDF sails on the first day of the show, when Japan's Toshiba Corp. on Monday announced a plan to slash 18,800 jobs, or 10% of its headcount, due to the downturn. Toshiba, the huge electronics conglomerate, is also one of the world's largest notebook PC makers (see Aug. 26 story).
On Tuesday, reports broke that Toshiba is apparently in talks chip several companies, including Samsung Electronics Co. Ltd., to find a new home for its troubled DRAM business (see Aug. 28 story).
Also on Tuesday, PC maker Gateway Inc. in San Diego announced that it would reduce its headcount by 5,000 jobs, or 25% of its workforce, and eliminate overseas operations. For years, Gateway has been an "Intel house," that is, a PC company that primarily buys Intel's processors and boards.
On Wednesday, Intel's PC processor rival--Advanced Micro Devices Inc.--estimated that its revenues will sequentially fall on the low side of its previous forecast, dropping 15% in the current third quarter from $985.3 million in Q2. Some in the industry wonder if this new guidance was an indication that the PC business was still working its way to the bottom of the slump.
And today--Friday, one day after Intel's forum ended--Hitachi Ltd. in Japan capped off the week by announcing the elimination 14,700 jobs, or 4% or its workforce, and a major restructuring of the company's semiconductor business (see Aug. 31 story).
Mercifully, the IDF week is over.