Kirk Pond, in an interview with EE Times, said he initially noticed customer backlog "getting really choppy" in May. "As we dug into it, we discovered people were becoming more cautious about the second half of '04, and they were beginning to deal with inventory building."
"We talked about it in at an analysts conference, and everybody waved their arms and said, 'there must be something wrong with Fairchild because we're not hearing that from anyone else,'" Pond said. "And then sure enough by June-July everybody was saying that."
Pond said he saw "the classic phenomenon where 10 people think they're going to get 20 percent of the market" and buy components based on that hope. In addition, warnings from Wal-Mart on lackluster back-to-school sales and diminished expectations on Christmas sales are dampening enthusiasm, he said.
"Is the cycle over? No. Are we going through an inventory correction? Yes. But this is going to keep quarter to quarter change pretty modest through fourth quarter '04 and first quarter '05," Pond said.