Now Hear This!

Here in NY, I have a small lemon tree tossed in-pot into my backyard. It's a house plant that's been bred to only grow to 5 feet in height maximum and that, due to my lack of a green thumb and any basic gardening skills, was left outside all year, un-watered for several months. Forced to suffer a long harsh east coast winter, it has lost all but a few leaves that are now brown, wind torn, and that crumble when touched.

Yet somehow -- perhaps insulated from the cold by the leaves and mud collected on its base, perhaps nourished serendipitously with snow and rain, and natural helpers like earthworms and rich soil -- this lemon tree is now once again showing buds. 

Were this a plant native to a NY-like climate I would not find this surprising. Evergreens, for example, thrive unattended in the cold. Lemon trees, however, are west coast, sun-loving, warmth-needing trees that tend to struggle even under the best of east coast circumstances.

This March 24th, it's officially spring and looking back at late November through mid March, this past winter was one of the worst in a long while here and easily one that could be compared to the economy: cold, stormy, dark with this never ending feeling of seasonal despair (at least from my cooped up point of view).

And like this lone lemon tree, once tossed aside and thought to be done for, we are starting to see signs of a spring rebirth in the economy and our semiconductor industry.

The Dow has had some solid days this month. A report out from the Consumer Electronics Association this morning suggested consumer confidence is on the rise again. And, while companies continue to trim jobs, I've noticed more and more people are calling to see if they can use me as a reference for coming job interviews than those calling to say they've been laid off -- a refreshing change from the dozens of calls from tech sector professionals I received in January alone saying they were let go.

Specific to the semiconductor industry are reports out of Taiwan this week stating that the top two foundries, TSMC and UMC, have ended or are ending their unpaid leave actions. Reports say UMC ended the policy in mid March and that TSMC will do so on April 1.

Both of the foundries had inflicted unpaid time off, cost-cutting policies on their manufacturing employees toward the end of Q4 as the economy's downturn deepened and demand from across the globe seemed to be nonexistent.

Now the two rivals are each reporting quick orders from customers, especially from the mainland Chinese market, that have spurred production demands. Indeed, TSMC even raised its Q1 estimates on the claimed demand increase earlier this month.

The handful of Taiwanese reports each raise the question, "has the semiconductor industry hit its bottom?" in one form or another, as manufacturing is a good gauge of usage and demand. Here, TSMC Chairman Morris Chang cautiously says no, warning that he believes the US economy won't improve until the end of 2009/early 2010 and that he "hopes Taiwan's economy will recover earlier."

I agree with Chang's sour caution, but still see the revoked policies as reason to celebrate in this climate. This economy hasn't become about turning lemons into lemonade as much as it is now about finding the lemons and looking for budding signs of life.

Just as I don't expect my 401k to miraculously return to its pre-November stature and only a fool would expect TSMC, UMC, or any other industry company to show strong revenue growth in 2009, I don't expect to make lemonade this year from my tree's produce. Odds are that there won't be enough lemons to juice. But I'll collect what I can this summer, bitter as they will most likely be, and squeeze what I can out of them before I more vigilantly attend to the tree this coming fall, now not carelessly assuming fruit without effort.

Are you seeing signs of life out there or is it still a frozen tundra from your standpoint? Share your thoughts on this economy's sweeter spots below.