Computer shipments should improve later this year, but telecommunications equipment sales will probably not step up until late 2002, Intel chief executive Officer Mr Craig Barrett has said.
"Computing is more stable. We can expect some improvement in the second half (of 2001). But communications is still in the sick bay. Over-investment will take a year to wear off," he told the Colorado Technology Summit last night.
Mr Barrett did not speak specifically about the near-term outlook for Intel, the world's largest semiconductor maker.
He said traditionally telecom companies have spent about 17 per cent of revenues on new equipment, but last year the figure spiked to 35 per cent. It was unprecedented and unsustainable. It will be the end of 2002 before the sector starts to grow again, he said.
He said the US economy is probably more than halfway through the current economic slump and one bright spot he saw was that other industries such as autos and consumer goods did not appear to be very hard hit.
"The Internet is not slowing down even in the midst of this telecommunications slowdown," Mr Barrett said effusively, as he urged people in the audience to take more interest in education, especially math and science.
He decried the fact that US youngsters hold their own in math and science until they are about 10 years old, but fall behind children in other countries as they grow older.
He said 500 million people were connected on the Internet and one million new auction links are posted on eBay every day. But he said the $12 million of retail shopping on the Internet every day is still very small, paling in comparison to even Intel, which does $60 million of business every day on the Internet with its customers.
He said while a lot of attention remains focused on retail sales on the Internet the real future is in business-to-business sales.