Cyclical industrial dynamics in the global IT sector : origins and sequencing

In this article, we investigate the origins and dynamics of cyclical behaviour in the IT sector. Our lead-lag analysis shows the historical cyclical patterns involved in the global semiconductor industry, the computer industry, and the flat panel display industry. Based on the Granger causality tests derived from a vector autoregressive (VAR) model, we find that in the global semiconductor industry, changes in capacity utilization precede changes in sales, which in turn leads to changes in semiconductor price.