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By Zied H.A.

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Scalise Semiconductor Industry Association Mr. Scalise prefaced his talk by addressing the unfortunate events of September 11 and their impact on the semiconductor industry. ” He agreed, saying that that observation was still valid and would continue to be valid for a long period. THE NEAR-TERM OUTLOOK He began with the near-term outlook, showing a chart on which worldwide semiconductor revenues were down about 37 percent as of July 2001. He called that decline “dramatic” but said it was slightly better than it had been on a monthto-month basis in the prior period.

DISCUSSION Mr. McFadden noted, in regard to the last point, that the industry at its inception in the 1960s used the results of fundamental research done in the 1940s and 1950s to develop its technologies. “Yet we see the federal government reducing the amount of funding in the basic sciences,” he said, “at the same time the industry is pressed to maintain its level of capital spending and investment. S. ”4 4Proponents argue that research consortia can efficiently address most of the basic research needs of the semiconductor industry, as articulated in the ITRS, by focusing on precompetitive research needs, providing financial leveraging, and controlling redundancy.

Thus frontier and non-frontier are relative terms. For example, when both Pentium 2 and Pentium 3 processors were in the market, CYCLICALITY: COMPARISONS BY INDUSTRY 31 Pentium 3 was used as the frontier product for the model. Then Pentium 3 became the non-frontier product with the introduction of Pentium 4. The “Entry” of a Plant The firm produces each product in a separate plant, so that a plant represents a particular type of product. The entry of a firm into the production of a new product can be expressed as the “entry” of a new plant.

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