Semi Slowdown

Synopsys CEO Aart de Geus on conference call:

“First, I don’t want to be the person here calling the downturn of the semi cycle. What we’re reporting is a degree of caution where people are looking forward with question marks. At the same time, there are a number of people that are looking for 2H to still be okay from a semiconductor point of view.”

“In terms of the spending environment, in July our customers became markedly more cautious about extending commitments and spending cash. This caution was triggered by some inventory buildup and a lack of visibility. Since then, a number of our customers have announced earnings below expectations or reduced forecasts.”

“With greater uncertainty around the spending environment, we are no longer counting on the recovery expected in the second half of the calendar year.”

“I think the biggest change really occurred in July, where we saw that the customer base became markedly more nervous about the future, maybe triggered by some sense of inventory buildup, some uncertainty and non visibility of ’05. But definitely much more cautious in terms of making longer-term commitments.”