Cyclical Dynamics in Three Industries

In this paper we offer a procedure to identify the industry cycles, and apply the procedure to the industrial data of three industries, namely semiconductors, PCs and FPDs. The identified cycles enable us to conduct two comparison analyses: (1) comparing the cycles with those suggested by industry experts in the corresponding industries; (2) comparing the industry cycles across the three industries. Moreover, we examine the factors possibly contributing to the cyclical dynamics of the industries built on three lines of explanations in the literature. Our vector auto regression (VAR) models establish that the dynamics of aggregate economy and capacity are among the most significant drivers in our semiconductor industry cycle.