The second half of 2011 is behind us, literally and figuratively.

2011 roared out of the starting blocks before veering off the recovery path beginning in the late summer or early fall. Around November, many forecasters were predicting the doldrums to remain through summer 2012. (Some are hewing this line.)

It looks like the industry wasn't listening. Green shoots were already beginning to emerge, some forced to the surface by one-time events like the Thailand flooding, but others due to pent-up demand by consumers and businesses.

Several large and mid-tier EMS companies, including MFlex, Flextronics, CTS, Viasystems and Key Tronic have reported December quarter revenues that topped previous expectations. Component manufacturers and foundries like Vishay and UMC are calling a bottom. Broader manufacturing indices are looking better.

I think there remains a considerable amount of inventory in the chain, but much of this is held at distributors. Thus, models that heavily weight component manufacturer revenues are going to be a bit off while the rest of the chain works through their inventory conditions. But demand down the line is improving, and I think come this time next year, we will look at the September 2011 period as the trough.