Threat of War in Iraq May Slow Technology Growth and Recovery

The market for technology and electronic consumer goods was beginning to make a modest recovery near the end of 2002 with the threat of war between the U.S. and Iraq just a threat. With the U. S. military gearing up for what appears to be a major showdown with Iraq, war seems to be more of reality.

Some business forecasters are concerned over the effects a war may have on the technology industry. The world's largest semiconductor equipment manufacturer, Applied Materials, Inc. has reduced its forecasts for orders in response to spending cuts by chip manufacturers who are jittery over the economy and the effects of a war on the world economy. However, the Semiconductor Industry Association forecast a strong year for the chip industry, with predicted worldwide revenue from chip sales rising 19.8% in 2003. Resellers of computer products and electronic components, often considered an early industry indicator of consumer demand trends, reportedly have indicated that there is no sign yet that the threat of war has cut into their orders.

Most executives seem to agree that if the war is of a short duration, there may be some short-term downtowns, but these will not endure in the long-term economic picture. The consensus also indicates that the technology sector of the U. S. economy will remain somewhat unstable until either a decisive war breaks out with Iraq or until the threat of war diminishes. "I don't see the economy really settling down until we make a decision one way or another (on Iraq)," according to Joe Tucci, CEO of EMC Corporation, a manufacturer of data storage hardware. "Everybody's nervous."