BY TOM HART Chairman, President and Chief Executive Officer, QuickLogic Corp., Sunnyvale, Calif.

Semiconductor manufacturers have very poor ongoing insight into the growing contract-manufacturing industry. Little information exists on the volumes available and where they reside-at the chip manufacturer or within the contract- manufacturing chain. Nor is that challenge going to ease when the economy starts to accelerate again. A report by Thomas Weisel Partners said OEMs generated $5 billion in outsourcing deals in the first quarter-after the slide began. And, as the author noted, "We wouldn't be surprised to see an additional $20 billion in 2001."

I'm willing to bet that forecast will be moderated somewhat as actual numbers emerge later in the year. But the point is clear: The rapid growth in outsourcing to contract manufacturers will continue. Therefore, more and better data on semiconductor inventories is essential to our planning.

However, all the information in the world won't do any good if we can't put it to use. That's why the industry should move forward on installing advanced software that will catch changes in demand, lower stockpiles and better manage the entire supply chain. Though some companies have begun installing that kind of software, its use was not far along when the crash occurred. While the semiconductor industry creates technology with almost unheard-of sophistication, it doesn't innovate its business systems as rapidly. I hope the pain we've suffered in the first half of 2001 gets us moving faster on this vital front.

Finally, I believe we need to go into the second half of this year and onto a fresh 2002 with a slightly revised attitude toward our ability

to analyze and forecast. We should put our effort into the data gathering, the analysis and the application. The industry exists and thrives due to entrepreneurs with big ideas and the

drive to bring them to reality. Those kinds of leaders rely on their instincts and faith in their ability to make things happen. But as the postmortem of the crash shows, we missed some data-driven hints at what was to come, such as the start of the telecom slowdown.

We should put more energy into finding the information we need and using it effectively. Better visibility of the entire supply chain will aid in reducing the wild swings in demand.