Future demand for electronics remains fairly bullish, according to PURCHASING's exclusive index on buyers' spending plans (see chart at left). One bright spot is the silicon foundry market, which will grow 31% in 2002, says a still-bullish Joanne Itow at Semico Research. "I am sticking to my forecast even though everyone is saying that the market is down in the dumps," she says. Reason: A belief that second-half wafer demand will grow and push fab utilization rates higher than current 70% of capacity.

High-tech rush to the Orient. General Electric, Hewlett-Packard, Olympus Optical, Dell Computer and Motorola are establishing purchasing centers in China. Chinese Ministry of Foreign Trade and Economic Cooperation says the U.S. firms have committed to boost sourcing from Chinese firms in the manner of IBM and Stanley Works, which already have launched purchasing centers there.

Apple Computer's sleek new 17-inch flat-panel iMac is so popular that some buyers have to wait weeks to get one. Apple, which was plagued by inventory problems in the early 1990s, has done a good job forecasting product demand the last few years. But earlier this year, a shortage of LCD panels led to a dearth of iMacs with 15-inch screens. Some customers waited up to several months to get one.

High-tech companies are very often—out of necessity—on the cutting edge in product innovation as well as management techniques. To find out how companies like Motorola, IBM, Cisco and Lucent get more from their suppliers, order your copy of PURCHASING's new publication Electronics Supply Strategies at the bookstore.

Telecommunications equipment suppliers "will not see a snap-back in spending" by telecom carriers anytime soon, says Merrill Lynch analyst Tal Liani. He now believes carrier capital expenditures will decline 30% in 2002 to $59 billion and fall 4% more in 2003 to $56.6 billion because of continued budget cuts in lackluster sales years.

Nokia, Motorola and other major handset makers once again have reduced their expectations for 2002. In January, the consensus estimate for global handset sales was 430 million. That number dropped to 420 million by April and now stands at 390-400 million. Tim Long of Credit Suisse First Boston isn't quite as gloomy; projecting 435 million handset buys this year.