In a press statement, Advanced Forecasting said, "The industry is currently in an early stage of overheating, though frenzied double ordering reminiscent of 2000 could quickly change that status into severe overheating."

"For the time being, based on our analysis of actual IC shipments in relation to forecasted underlying demand, the boom should continue."

Advanced Forecasting reiterated its 2004 revenues growth forecast rate of 30%-plus worldwide.

"The true trigger of a recession is the buildup of excessive IC production capacity in relation to softening underlying demand. ... As long as the slope of actual shipments slows down to coincide with that of underlying demand, the industry will remain safe," the firm said.

Some concerns have arisen over reports that capacity utilization rates for silicon wafers are nearing ranges seen prior to recessions in 1996 and 2001. Advanced Forecasting calls a very high utilization rate "necessary but not sufficient for triggering a recession."

"If actuals continue to outpace underlying demand and over-heating continues to build, the downward turning-point will arrive earlier than predicted for underlying demand," Luis said.